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DESJA
RDIN
S INSU
RA
NC
ED
FS GU
ARA
NTEED
INV
ESTMEN
T FUN
DS
2015 SEMI-A
NN
UA
L REPORT
DFS GUARANTEED INVESTMENT FUNDS
DFS Guaranteed Investment Funds are established by Desjardins Financial Security Life Assurance Company.
Desjardins Insurance refers to Desjardins Financial Security Life Assurance Company.
DFS GUARANTEED INVESTMENT FUNDS
0827
6E (1
5-10
)
Financial Information as of June 30, 2015
2015 Semi-Annual Report
desjardinslifeinsurance.comThis Document is also available on our website:
JUNE 2015
Thank you.Thank you for choosing the strength and stability of a company specialized in providing individual insurance and retirement savings products to over five million Canadians, every day, to ensure their financial security.
Thank you for also choosing Desjardins Group, the largest cooperative financial group in Canada, whose financial stability is recognized by the following credit ratings which are comparable, if not superior to those of the five largest Canadian banks and insurance companies:
• Standard and Poor’s A+ • Moody’s Aa2 • Dominion Bond Rating Service AA • Fitch AA-
The Contract and Information Folder contains important information on the DFS Guaranteed Investment Funds. Please read it carefully before investing. DFS Guaranteed Investment Funds is a registered trademark owned by Desjardins Financial Security Life Assurance Company. DFS Guaranteed Investment Funds are established by Desjardins Financial Security Life Assurance Company.
DFS stands for Desjardins Financial Security.
Desjardins Insurance refers to Desjardins Financial Security Life Assurance Company.
This document is printed on Rolland Enviro paper.
100%
1DFS GUARANTEED INVESTMENT FUNDS
DFS GUARANTEED INVESTMENT FUNDS
Investment SolutionsDFS GIF – Conservative – Multi-managers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4DFS GIF – Moderate – Multi-managers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10DFS GIF – Balanced – Multi-managers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16DFS GIF – Growth – Multi-managers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22DFS GIF – Maximum Growth – Multi-managers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Individual FundsIncome
DFS GIF – Money Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36DFS GIF – Income – Beutel Goodman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41DFS GIF – Income – Fiera . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Balanced and Asset AllocationDFS GIF – Diversified Income – Quotential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56DFS GIF – Balanced Income – Quotential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61DFS GIF – Canadian Balanced – Fidelity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66DFS GIF – Canadian Balanced – Fiera . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71DFS GIF – Canadian Balanced – Bissett . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84DFS GIF – Balanced Growth – Quotential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89DFS GIF – Canadian Balanced – CI Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94DFS GIF – Balanced – Ethical . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99DFS GIF – Income and Growth – CI Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104DFS GIF – Growth and Income – Northwest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109DFS GIF – Global Growth – Northwest Select . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114DFS GIF – Global Balanced – Jarislowsky Fraser . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119DFS GIF – Canadian Asset Allocation – CI Cambridge . . . . . . . . . . . . . . . . . . . . . . . 124DFS GIF – Growth – Quotential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129DFS GIF – Global High Income – Multi-managers . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
Canadian EquityDFS GIF – Dividend Income – Bissett . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143DFS GIF – Canadian Dividend – Fiera . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148DFS GIF – Canadian Dividend – Northwest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161DFS GIF – Canadian Equity – Fidelity True North® . . . . . . . . . . . . . . . . . . . . . . . . . . 166DFS GIF – Canadian Equity – Bissett . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171DFS GIF – Canadian Equity – Fiera . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176DFS GIF – Canadian Equity – Jarislowsky Fraser . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183DFS GIF – Specialty Equity – Northwest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188DFS GIF – Small Cap – Bissett . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193
Foreign EquityDFS GIF – American Equity – MFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198DFS GIF – American Equity Value – Desjardins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203DFS GIF – Global Dividend – Desjardins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208DFS GIF – Global Equity – MFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213DFS GIF – Global – Fidelity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218DFS GIF – International Equity – MFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223DFS GIF – International Equity Growth – Desjardins . . . . . . . . . . . . . . . . . . . . . . . . . 228
NOTES TO THE FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233
TABLE OF CONTENTS
What’s a DFS GIF?DFS stands for Desjardins Financial Security.
GIF stands for Guaranteed Investment Fund.
A Guaranteed Investment Fund (GIF), commonly known as “segregated fund“ is an investment fund created and issued exclusively by life insurance companies. It is offered through Contracts which provide maturity and death benefit guarantees.
Is this document available online?Yes, at desjardinslifeinsurance.com/ GIFreports.
Is it possible to opt out of receiving paper copies of this financial report? Yes. Please send a letter to:
Desjardins Financial Security GIF Administration 1 Complexe Desjardins P.O. Box 9000 Montreal, QC H5B 1H5
Or send an email to:
Please include your name, mailing address, telephone number, email address and client number in your request, and indicate whether your request applies to the annual financial report and/or the semi- annual financial report.
DFS GUARANTEED INVESTMENT FUNDS
Investment Solutions
4 DFS GUARANTEED INVESTMENT FUNDS
DFS GIF – CONSERVATIVE – MULTI-MANAGERS
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash — 527 Investments at fair value through profit
or loss (FVTPL) 6,065,572 2,867,854 Premiums receivable 8,438 9,468 Receivable for securities sold 2,642 —
6,076,652 2,877,849
LIABILITIESCurrent LiabilitiesBank overdraft 2,143 —Accrued expenses 12,020 5,197 Withdrawals payable 29,171 1,178 Payable for securities purchased 7,695 671
51,029 7,046
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 6,025,623 2,870,803
NET ASSETS PER UNITSeries 6 5.25 5 .18 Series 7 5.28 5 .19
The accompanying notes are an integral part of these financial statements.
STATEMENT OF COMPREHENSIVE INCOME – unauditedPeriods Ended June 30
2015 2014*(6 months) (5 months)
$ $
INCOMEInterest for attribution purposes 64,021 5,817 Dividends 13,221 1,660 Changes in fair value:
Net realized gain (loss) on investments 7,987 (2)Net unrealized gain (loss) on investments (2,765) (900)
82,464 6,575
EXPENSESManagement fees and guarantee charge 54,525 2,256 Operating expenses 5,606 210
60,131 2,466 Withholding taxes 699 —
60,830 2,466
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 21,634 4,109
DATA PER SERIESSERIES 6Increase (Decrease) in Net Assets
from Operations 15,802 4,092 - per unit 0.02 0 .08
Average number of units 820,642 51,468
SERIES 7Increase (Decrease) in Net Assets
from Operations 5,832 17 - per unit 0.05 0 .08
Average number of units 110,078 200
* Beginning of operations in February 2014.
5DFS GUARANTEED INVESTMENT FUNDS
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Periods Ended June 302015 2014*
(6 months) (5 months)$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 2,870,803 —Increase (Decrease) in Net Assets
from operations attributable to contract owners 21,634 4,109
PremiumsSeries 6 2,954,416 736,838 Series 7 597,251 1,001
3,551,667 737,839
WithdrawalsSeries 6 (408,481) (1,564)Series 7 (10,000) —
(418,481) (1,564)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 6,025,623 740,384
STATEMENT OF CASH FLOWS – unauditedPeriods Ended June 30
2015 2014*(6 months) (5 months)
$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 21,634 4,109
Adjustments for:Net realized gain (loss) (7,987) 2 Net unrealized gain (loss) 2,765 900
Proceeds from sale/ maturity of investments 258,992 545
Investments purchased (3,451,488) (742,716)Receivable for securities sold (2,642) —Accrued expenses 6,823 1,184 Payable for securities purchased 7,024 15,060
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES (3,164,879) (720,916)
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 3,552,697 737,764 Amounts paid on withdrawals (390,488) (1,347)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES 3,162,209 736,417
Increase (decrease) in cash/bank overdraft (2,670) 15,501
Cash (bank overdraft), beginning of period 527 —
CASH (BANK OVERDRAFT), END OF PERIOD (2,143) 15,501
SUPPLEMENTAL INFORMATION ON CASH FLOWS FROM/USED IN OPERATING ACTIVITIESInterest paid — 2
The accompanying notes are an integral part of these financial statements.* Beginning of operations in February 2014.
6 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUNDS (100.7%)Beutel Goodman Income Fund, I-Class 194,513 2,449,547 2,422,439 BlackRock Active Canadian Equity DC Fund 5,349 170,326 162,264 BlackRock CDN US Equity Index Fund, Class D 22,483 348,273 367,078 Desjardins Overseas Equity Growth Fund, I-Class 9,081 170,384 183,212 Desjardins Overseas Equity Value Fund, I-Class 11,980 178,198 179,418 DGIA Canadian Bond Fund 237,035 2,431,041 2,429,189 Fidelity True North® Fund, Series O 3,467 158,897 162,345 Franklin Bissett Canadian Equity Fund, Series O 1,210 162,617 159,627
TOTAL INVESTMENTS 6,069,283 6,065,572
OTHER NET ASSETS (-0.7%) (39,949)
NET ASSETS (100%) 6,025,623
The accompanying notes are an integral part of these financial statements.
TOP FIVE HOLDINGS OF THE UNDERLYING FUNDS – unaudited
Security Name Percentage of Portfolio
DGIA CANADIAN BOND FUND 40.4%Canada Housing Trust, 1 .95%, June 15, 2019 1 .9%Canada Housing Trust, 1 .85%, December 15, 2016 1 .6%Canada Housing Trust, 2 .35%, December 15, 2018 1 .5%Canada Housing Trust, 2 .05%, June 15, 2018 1 .4%Government of Canada, 5 .75%, June 1, 2033 1 .4%
BEUTEL GOODMAN INCOME FUND 40.2%Canada Housing Trust, 2 .05%, June 15, 2017 8 .7%Canada Housing Trust, 1 .70%, December 15, 2017 7 .4%Canada Housing Trust, 1 .85%, December 15, 2016 6 .1%Canada Housing Trust, 2 .75%, June 15, 2016 4 .2%Canada Housing Trust, 2 .05%, June 15, 2018 3 .0%
BLACKROCK CDN US EQUITY INDEX FUND 6.1%Apple 4 .0%Microsoft Corporation 2 .0%Exxon Mobil Corporation 1 .9%Johnson & Johnson 1 .5%General Electric Company 1 .5%
DESJARDINS OVERSEAS EQUITY GROWTH FUND 3.0%Tencent Holdings 4 .9%Inditex 4 .6%Fiat Chrysler Automobiles 4 .5%Baidu, ADR 4 .3%AIA Group 4 .2%
DFS GIF – CONSERVATIVE – MULTI-MANAGERS (cont.)
7DFS GUARANTEED INVESTMENT FUNDS
Security Name Percentage of Portfolio
DESJARDINS OVERSEAS EQUITY VALUE FUND 3.0%Novartis AG 4 .5%Roche Holding AG 4 .4%Japan Tobacco Inc . 3 .9%British American Tobacco 3 .9%Nestlé 3 .6%
FIDELITY TRUE NORTH ® FUND 2.7%Toronto-Dominion Bank 7 .2%Loblaw Companies 4 .6%Valeant Pharmaceuticals International 4 .1%Manulife Financial Corporation 4 .0%Canadian National Railway Company 3 .1%
BLACKROCK ACTIVE CANADIAN EQUITY DC FUND 2.7%Royal Bank of Canada 6 .5%Toronto-Dominion Bank 6 .3%Valeant Pharmaceuticals International 5 .6%Scotiabank 3 .9%Manulife Financial Corporation 3 .3%
FRANKLIN BISSETT CANADIAN EQUITY FUND 2.6%Brookfield Asset Management 5 .8%Canadian National Railway Company 4 .8%Toronto-Dominion Bank 4 .7%Canadian Imperial Bank of Commerce 4 .5%Royal Bank of Canada 4 .4%
TOP FIVE HOLDINGS OF THE UNDERLYING FUNDS – unaudited (cont.)
8 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment Objective
To generate a consistent flow of income with an emphasis on the preservation of capital by investing in a number of different fixed income and equity underlying funds .
The principal risk factors of this Fund are interest rate, foreign currency, credit, sovereign, market, special equities and derivatives risk .
Investment StrategyTo invest in a wide array of underlying funds managed by using a multi-manager approach provided by acclaimed fund managers and sub-advisors .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 3,107,041 2,958,531 — 6,065,572 TOTAL 3,107,041 2,958,531 — 6,065,572
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 1,463,895 1,403,959 — 2,867,854 TOTAL 1,463,895 1,403,959 — 2,867,854
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Funds Risk ManagementMonthly, the investment strategy team compares the Funds’ performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Funds’ performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Funds’ investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Funds’ managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying funds . Detailed disclosure about the currency risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .
DFS GIF – CONSERVATIVE – MULTI-MANAGERS (cont.)
9DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying funds . Detailed disclosure about the interest rate risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which are exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying funds . Detailed disclosure about the concentration risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which are exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying funds . Detailed disclosure about the price risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s best estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, with all other variables held constant, is as follows:
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmarks % $ $FTSE TMX Canada Universe (80%) 1 .00 48,205 22,966S&P/TSX (8%) 3 .00 14,461 6,890S&P 500 (6%) 3 .00 10,846 5,167MSCI EAFE Net (6%) 3 .00 10,846 5,167
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying funds . Detailed disclosure about the credit risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which are exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying funds . Detailed disclosure about the liquidity risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
10 DFS GUARANTEED INVESTMENT FUNDS
DFS GIF – MODERATE – MULTI-MANAGERS
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 63,523 29,728 Investments at fair value through profit
or loss (FVTPL) 9,134,058 5,311,842 Premiums receivable 219,068 41,963 Receivable for securities sold 5,949 —
9,422,598 5,383,533
LIABILITIESCurrent LiabilitiesAccrued expenses 18,545 10,249 Withdrawals payable 21,319 2,721 Payable for securities purchased 97,251 9,443
137,115 22,413
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 9,285,483 5,361,120
NET ASSETS PER UNITSeries 6 5.32 5 .21 Series 7 5.35 5 .23
STATEMENT OF COMPREHENSIVE INCOME – unauditedPeriods Ended June 30
2015 2014*(6 months) (5 months)
$ $
INCOMEInterest for attribution purposes 77,977 9,791 Dividends 34,736 5,346 Changes in fair value:
Net realized gain (loss) on investments 18,117 28 Net unrealized gain (loss) on investments 32,881 6,434
163,711 21,599
EXPENSESManagement fees and guarantee charge 85,774 6,384 Operating expenses 8,447 580
94,221 6,964 Withholding taxes 1,845 —
96,066 6,964
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 67,645 14,635
DATA PER SERIESSERIES 6Increase (Decrease) in Net Assets
from Operations 59,901 14,614 - per unit 0.04 0 .10
Average number of units 1,351,439 142,371
SERIES 7Increase (Decrease) in Net Assets
from Operations 7,744 21 - per unit 0.12 0 .10
Average number of units 62,611 202
* Beginning of operations in February 2014.
11DFS GUARANTEED INVESTMENT FUNDS
The accompanying notes are an integral part of these financial statements.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Periods Ended June 302015 2014*
(6 months) (5 months)$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 5,361,120 —Increase (Decrease) in Net Assets
from operations attributable to contract owners 67,645 14,635
PremiumsSeries 6 4,441,780 1,425,008 Series 7 967 1,001
4,442,747 1,426,009
WithdrawalsSeries 6 (586,027) (6,509)Series 7 (2) —
(586,029) (6,509)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 9,285,483 1,434,135
STATEMENT OF CASH FLOWS – unauditedPeriods Ended June 30
2015 2014*(6 months) (5 months)
$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 67,645 14,635
Adjustments for:Net realized gain (loss) (18,117) (28)Net unrealized gain (loss) (32,881) (6,434)
Proceeds from sale/ maturity of securities 460,873 4,022
Investments purchased (4,232,091) (1,409,037)Receivable for securities sold (5,949) —Accrued expenses 8,296 2,843 Payable for securities purchased 87,808 80,384
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES (3,664,416) (1,313,615)
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 4,265,642 1,352,005 Amounts paid on withdrawals (567,431) (5,865)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES 3,698,211 1,346,140
Increase (decrease) in cash/bank overdraft 33,795 32,525
Cash (bank overdraft), beginning of period 29,728 —
CASH (BANK OVERDRAFT), END OF PERIOD 63,523 32,525
SUPPLEMENTAL INFORMATION ON CASH FLOWS FROM/USED IN OPERATING ACTIVITIESInterest paid — 4
* Beginning of operations in February 2014.
12 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015
Number of Units Cost
Fair Value
$ $
INVESTMENT FUNDS (98.4%)Beutel Goodman Income Fund, I-Class 237,428 2,986,295 2,956,890 BlackRock Active Canadian Equity DC Fund 14,247 460,062 432,246 BlackRock CDN US Equity Index Fund, Class D 59,941 912,961 978,654 Desjardins Overseas Equity Growth Fund, I-Class 23,912 446,926 482,429 Desjardins Overseas Equity Value Fund, I-Class 31,539 470,612 472,339 DGIA Canadian Bond Fund 289,294 2,958,354 2,964,745 Fidelity True North® Fund, Series O 9,121 417,388 427,072 Franklin Bissett Canadian Equity Fund, Series O 3,182 430,625 419,683
TOTAL INVESTMENTS 9,083,223 9,134,058
OTHER NET ASSETS (1.6%) 151,425
NET ASSETS (100%) 9,285,483
The accompanying notes are an integral part of these financial statements.
TOP FIVE HOLDINGS OF THE UNDERLYING FUNDS – unaudited
Security Name Percentage of Portfolio
DGIA CANADIAN BOND FUND 32.0%Canada Housing Trust, 1 .95%, June 15, 2019 1 .9%Canada Housing Trust, 1 .85%, December 15, 2016 1 .6%Canada Housing Trust, 2 .35%, December 15, 2018 1 .5%Canada Housing Trust, 2 .05%, June 15, 2018 1 .4%Government of Canada, 5 .75%, June 1, 2033 1 .4%
BEUTEL GOODMAN INCOME FUND 31.9%Canada Housing Trust, 2 .05%, June 15, 2017 8 .7%Canada Housing Trust, 1 .70%, December 15, 2017 7 .4%Canada Housing Trust, 1 .85%, December 15, 2016 6 .1%Canada Housing Trust, 2 .75%, June 15, 2016 4 .2%Canada Housing Trust, 2 .05%, June 15, 2018 3 .0%
BLACKROCK CDN US EQUITY INDEX FUND 10.5%Apple 4 .0%Microsoft Corporation 2 .0%Exxon Mobil Corporation 1 .9%Johnson & Johnson 1 .5%General Electric Company 1 .5%
DESJARDINS OVERSEAS EQUITY GROWTH FUND 5.2%Tencent Holdings 4 .9%Inditex 4 .6%Fiat Chrysler Automobiles 4 .5%Baidu, ADR 4 .3%AIA Group 4 .2%
DFS GIF – MODERATE – MULTI-MANAGERS (cont.)
13DFS GUARANTEED INVESTMENT FUNDS
Security Name Percentage of Portfolio
DESJARDINS OVERSEAS EQUITY VALUE FUND 5.1%Novartis AG 4 .5%Roche Holding AG 4 .4%Japan Tobacco Inc . 3 .9%British American Tobacco 3 .9%Nestlé 3 .6%
BLACKROCK ACTIVE CANADIAN EQUITY DC FUND 4.6%Royal Bank of Canada 6 .5%Toronto-Dominion Bank 6 .3%Valeant Pharmaceuticals International 5 .6%Scotiabank 3 .9%Manulife Financial Corporation 3 .3%
FIDELITY TRUE NORTH ® FUND 4.6%Toronto-Dominion Bank 7 .2%Loblaw Companies 4 .6%Valeant Pharmaceuticals International 4 .1%Manulife Financial Corporation 4 .0%Canadian National Railway Company 3 .1%
FRANKLIN BISSETT CANADIAN EQUITY FUND 4.5%Brookfield Asset Management 5 .8%Canadian National Railway Company 4 .8%Toronto-Dominion Bank 4 .7%Canadian Imperial Bank of Commerce 4 .5%Royal Bank of Canada 4 .4%
TOP FIVE HOLDINGS OF THE UNDERLYING FUNDS – unaudited (cont.)
14 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment Objective
To generate income while leaving room for some capital appreciation by investing in a number of different fixed income and equity underlying funds .
The principal risk factors of this Fund are interest rate, foreign currency, credit, sovereign, market, special equities and derivatives risk .
Investment StrategyTo invest in a wide array of underlying funds managed by using a multi-manager approach provided by acclaimed fund managers and sub-advisors .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 4,758,413 4,375,645 — 9,134,058 TOTAL 4,758,413 4,375,645 — 9,134,058
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 2,773,020 2,538,822 — 5,311,842 TOTAL 2,773,020 2,538,822 — 5,311,842
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Funds Risk ManagementMonthly, the investment strategy team compares the Funds’ performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Funds’ performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Funds’ investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Funds’ managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying funds . Detailed disclosure about the currency risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .
DFS GIF – MODERATE – MULTI-MANAGERS (cont.)
15DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying funds . Detailed disclosure about the interest rate risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .
Concentration Risk
As at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which are exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying funds . Detailed disclosure about the concentration risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which are exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying funds . Detailed disclosure about the price risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s best estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, with all other variables held constant, is as follows:
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmarks % $ $FTSE TMX Canada Universe (65%) 1 .00 60,356 34,847S&P/TSX (14%) 3 .00 38,999 22,517S&P 500 (10 .5%) 3 .00 29,249 16,888MSCI EAFE Net (10 .5%) 3 .00 29,249 16,888
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying funds . Detailed disclosure about the credit risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which are exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying funds . Detailed disclosure about the liquidity risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
16 DFS GUARANTEED INVESTMENT FUNDS
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 82,039 57,786 Investments at fair value through profit
or loss (FVTPL) 16,540,092 9,557,197 Premiums receivable 117,823 25,503
16,739,954 9,640,486
LIABILITIESCurrent LiabilitiesAccrued expenses 34,329 18,810 Withdrawals payable 15,178 5,016 Payable for securities purchased 59,647 19,977
109,154 43,803
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 16,630,800 9,596,683
NET ASSETS PER UNITSeries 6 5.36 5 .21 Series 7 5.40 5 .24
STATEMENT OF COMPREHENSIVE INCOME – unauditedPeriods Ended June 30
2015 2014*(6 months) (5 months)
$ $
INCOMEInterest for attribution purposes 108,652 12,554 Dividends 90,025 13,209 Changes in fair value:
Net realized gain (loss) on investments 22,566 484 Net unrealized gain (loss) on investments 114,685 16,174
335,928 42,421
EXPENSESManagement fees and guarantee charge 155,489 12,170 Operating expenses 15,060 1,082
170,549 13,252 Withholding taxes 4,778 —
175,327 13,252
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 160,601 29,169
DATA PER SERIESSERIES 6Increase (Decrease) in Net Assets
from Operations 148,750 29,148 - per unit 0.06 0 .11
Average number of units 2,299,951 266,028
SERIES 7Increase (Decrease) in Net Assets
from Operations 11,851 21 - per unit 0.06 0 .11
Average number of units 186,879 200
* Beginning of operations in February 2014.
DFS GIF – BALANCED – MULTI-MANAGERS
17DFS GUARANTEED INVESTMENT FUNDS
The accompanying notes are an integral part of these financial statements.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Periods Ended June 302015 2014*
(6 months) (5 months)$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 9,596,683 —Increase (Decrease) in Net Assets
from operations attributable to contract owners 160,601 29,169
PremiumsSeries 6 6,765,443 2,336,922 Series 7 605,227 1,001
7,370,670 2,337,923
WithdrawalsSeries 6 (340,584) (19,944)Series 7 (156,570) —
(497,154) (19,944)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 16,630,800 2,347,148
STATEMENT OF CASH FLOWS – unauditedPeriods Ended June 30
2015 2014*(6 months) (5 months)
$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 160,601 29,169
Adjustments for:Net realized gain (loss) (22,566) (484)Net unrealized gain (loss) (114,685) (16,174)
Proceeds from sale/ maturity of investments 425,431 65,781
Investments purchased (7,271,075) (2,387,516)Receivable for securities sold — (1,750)Accrued expenses 15,519 5,250 Payable for securities purchased 39,670 2,258
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES (6,767,105) (2,303,466)
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 7,278,350 2,321,245 Amounts paid on withdrawals (486,992) (19,030)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES 6,791,358 2,302,215
Increase (decrease) in cash/bank overdraft 24,253 (1,251)
Cash (bank overdraft), beginning of period 57,786 —
CASH (BANK OVERDRAFT), END OF PERIOD 82,039 (1,251)
SUPPLEMENTAL INFORMATION ON CASH FLOWS FROM/USED IN OPERATING ACTIVITIESInterest paid — 7
* Beginning of operations in February 2014.
18 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015
Number of Units Cost
Fair Value
$ $
INVESTMENT FUNDS (99.5%)Beutel Goodman Income Fund, I-Class 330,828 4,161,496 4,120,107 BlackRock Active Canadian Equity DC Fund 36,638 1,186,706 1,111,567 BlackRock CDN US Equity Index Fund, Class D 154,344 2,354,049 2,519,961 Desjardins Overseas Equity Growth Fund, I-Class 61,809 1,154,145 1,246,997 Desjardins Overseas Equity Value Fund, I-Class 81,539 1,224,090 1,221,136 DGIA Canadian Bond Fund 403,129 4,124,514 4,131,361 Fidelity True North® Fund, Series O 23,581 1,080,722 1,104,174 Franklin Bissett Canadian Equity Fund, Series O 8,222 1,116,800 1,084,789
TOTAL INVESTMENTS 16,402,522 16,540,092
OTHER NET ASSETS (0.5%) 90,708
NET ASSETS (100%) 16,630,800
The accompanying notes are an integral part of these financial statements.
TOP FIVE HOLDINGS OF THE UNDERLYING FUNDS – unaudited
Security Name Percentage of Portfolio
DGIA CANADIAN BOND FUND 24.9%Canada Housing Trust, 1 .95%, June 15, 2019 1 .9%Canada Housing Trust, 1 .85%, December 15, 2016 1 .6%Canada Housing Trust, 2 .35%, December 15, 2018 1 .5%Canada Housing Trust, 2 .05%, June 15, 2018 1 .4%Government of Canada, 5 .75%, June 1, 2033 1 .4%
BEUTEL GOODMAN INCOME FUND 24.7%Canada Housing Trust, 2 .05%, June 15, 2017 8 .7%Canada Housing Trust, 1 .70%, December 15, 2017 7 .4%Canada Housing Trust, 1 .85%, December 15, 2016 6 .1%Canada Housing Trust, 2 .75%, June 15, 2016 4 .2%Canada Housing Trust, 2 .05%, June 15, 2018 3 .0%
BLACKROCK CDN US EQUITY INDEX FUND 15.1%Apple 4 .0%Microsoft Corporation 2 .0%Exxon Mobil Corporation 1 .9%Johnson & Johnson 1 .5%General Electric Company 1 .5%
DESJARDINS OVERSEAS EQUITY GROWTH FUND 7.5%Tencent Holdings 4 .9%Inditex 4 .6%Fiat Chrysler Automobiles 4 .5%Baidu, ADR 4 .3%AIA Group 4 .2%
DFS GIF – BALANCED – MULTI-MANAGERS (cont.)
19DFS GUARANTEED INVESTMENT FUNDS
Security Name Percentage of Portfolio
DESJARDINS OVERSEAS EQUITY VALUE FUND 7.3%Novartis AG 4 .5%Roche Holding AG 4 .4%Japan Tobacco Inc . 3 .9%British American Tobacco 3 .9%Nestlé 3 .6%
BLACKROCK ACTIVE CANADIAN EQUITY DC FUND 6.7%Royal Bank of Canada 6 .5%Toronto-Dominion Bank 6 .3%Valeant Pharmaceuticals International 5 .6%Scotiabank 3 .9%Manulife Financial Corporation 3 .3%
FIDELITY TRUE NORTH ® FUND 6.6%Toronto-Dominion Bank 7 .2%Loblaw Companies 4 .6%Valeant Pharmaceuticals International 4 .1%Manulife Financial Corporation 4 .0%Canadian National Railway Company 3 .1%
FRANKLIN BISSETT CANADIAN EQUITY FUND 6.5%Brookfield Asset Management 5 .8%Canadian National Railway Company 4 .8%Toronto-Dominion Bank 4 .7%Canadian Imperial Bank of Commerce 4 .5%Royal Bank of Canada 4 .4%
TOP FIVE HOLDINGS OF THE UNDERLYING FUNDS – unaudited (cont.)
20 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment Objective
To provide investors with an attractive balance of current income and capital appreciation by investing in a number of different fixed income and equity underlying funds .
The principal risk factors of this Fund are interest rate, foreign currency, credit, sovereign, market, special equities and derivatives risk .
Investment StrategyTo invest in a wide array of underlying funds managed by using a multi-manager approach provided by acclaimed fund managers and sub-advisors .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 8,777,203 7,762,889 — 16,540,092 TOTAL 8,777,203 7,762,889 — 16,540,092
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 5,061,958 4,495,239 — 9,557,197 TOTAL 5,061,958 4,495,239 — 9,557,197
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Funds Risk ManagementMonthly, the investment strategy team compares the Funds’ performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Funds’ performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Funds’ investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Funds’ managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying funds . Detailed disclosure about the currency risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .
DFS GIF – BALANCED – MULTI-MANAGERS (cont.)
21DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying funds . Detailed disclosure about the interest rate risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which are exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying funds . Detailed disclosure about the concentration risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which are exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying funds . Detailed disclosure about the price risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s best estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, with all other variables held constant, is as follows:
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmarks % $ $FTSE TMX Canada Universe (50%) 1 .00 83,154 47,983S&P/TSX (20%) 3 .00 99,785 57,580S&P 500 (15%) 3 .00 74,839 43,185MSCI EAFE Net (15%) 3 .00 74,839 43,185
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying funds . Detailed disclosure about the credit risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which are exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying funds . Detailed disclosure about the liquidity risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
22 DFS GUARANTEED INVESTMENT FUNDS
DFS GIF – GROWTH – MULTI-MANAGERS
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 16,395 21,720 Investments at fair value through profit
or loss (FVTPL) 10,232,121 5,272,114 Premiums receivable 132,968 57,613
10,381,484 5,351,447
LIABILITIESCurrent LiabilitiesAccrued expenses 22,136 9,763 Withdrawals payable 8,999 3,958 Payable for securities purchased 56,327 47,245
87,462 60,966
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 10,294,022 5,290,481
NET ASSETS PER UNITSeries 6 5.45 5 .26 Series 7 5.48 5 .28
STATEMENT OF COMPREHENSIVE INCOME – unauditedPeriods Ended June 30
2015 2014*(6 months) (5 months)
$ $
INCOMEInterest for attribution purposes 44,671 6,371 Dividends 72,009 12,698 Changes in fair value:
Net realized gain (loss) on investments 9,627 252 Net unrealized gain (loss) on investments 72,734 22,294
199,041 41,615
EXPENSESManagement fees and guarantee charge 93,546 10,524 Operating expenses 8,830 915
102,376 11,439 Withholding taxes 3,845 —
106,221 11,439
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 92,820 30,176
DATA PER SERIESSERIES 6Increase (Decrease) in Net Assets
from Operations 74,507 30,147 - per unit 0.06 0 .13
Average number of units 1,312,921 223,628
SERIES 7Increase (Decrease) in Net Assets
from Operations 18,313 29 - per unit 0.19 0 .14
Average number of units 95,951 200
* Beginning of operations in February 2014.
23DFS GUARANTEED INVESTMENT FUNDS
The accompanying notes are an integral part of these financial statements.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Periods Ended June 302015 2014*
(6 months) (5 months)$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 5,290,481 —Increase (Decrease) in Net Assets
from operations attributable to contract owners 92,820 30,176
PremiumsSeries 6 5,300,251 1,710,206 Series 7 14,698 1,001
5,314,949 1,711,207
WithdrawalsSeries 6 (401,203) (3,267)Series 7 (3,025) —
(404,228) (3,267)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 10,294,022 1,738,116
STATEMENT OF CASH FLOWS – unauditedPeriods Ended June 30
2015 2014*(6 months) (5 months)
$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 92,820 30,176
Adjustments for:Net realized gain (loss) (9,627) (252)Net unrealized gain (loss) (72,734) (22,294)
Proceeds from sale/ maturity of investments 231,320 23,304
Investments purchased (5,108,966) (1,742,691)Accrued expenses 12,373 4,045 Payable for securities purchased 9,082 28,396
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES (4,845,732) (1,679,316)
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 5,239,594 1,708,357 Amounts paid on withdrawals (399,187) (2,156)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES 4,840,407 1,706,201
Increase (decrease) in cash/bank overdraft (5,325) 26,885
Cash (bank overdraft), beginning of period 21,720 —
CASH (BANK OVERDRAFT), END OF PERIOD 16,395 26,885
SUPPLEMENTAL INFORMATION ON CASH FLOWS FROM/USED IN OPERATING ACTIVITIESInterest paid — 9
* Beginning of operations in February 2014.
24 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015
Number of Units Cost
Fair Value
$ $
INVESTMENT FUNDS (99.4%)Beutel Goodman Income Fund, I-Class 143,098 1,799,661 1,782,123 BlackRock Active Canadian Equity DC Fund 29,483 955,845 894,467 BlackRock CDN US Equity Index Fund, Class D 124,410 1,923,118 2,031,243 Desjardins Overseas Equity Growth Fund, I-Class 49,563 941,662 999,931 Desjardins Overseas Equity Value Fund, I-Class 65,451 990,590 980,184 DGIA Canadian Bond Fund 174,357 1,785,904 1,786,847 Fidelity True North® Fund, Series O 18,923 871,659 886,059 Franklin Bissett Canadian Equity Fund, Series O 6,604 896,381 871,267
TOTAL INVESTMENTS 10,164,820 10,232,121
OTHER NET ASSETS (0.6%) 61,901
NET ASSETS (100%) 10,294,022
The accompanying notes are an integral part of these financial statements.
TOP FIVE HOLDINGS OF THE UNDERLYING FUNDS – unaudited
Security Name Percentage of Portfolio
BLACKROCK CDN US EQUITY INDEX FUND 19.7%Apple 4 .0%Microsoft Corporation 2 .0%Exxon Mobil Corporation 1 .9%Johnson & Johnson 1 .5%General Electric Company 1 .5%
DGIA CANADIAN BOND FUND 17.4%Canada Housing Trust, 1 .95%, June 15, 2019 1 .9%Canada Housing Trust, 1 .85%, December 15, 2016 1 .6%Canada Housing Trust, 2 .35%, December 15, 2018 1 .5%Canada Housing Trust, 2 .05%, June 15, 2018 1 .4%Government of Canada, 5 .75%, June 1, 2033 1 .4%
BEUTEL GOODMAN INCOME FUND 17.3%Canada Housing Trust, 2 .05%, June 15, 2017 8 .7%Canada Housing Trust, 1 .70%, December 15, 2017 7 .4%Canada Housing Trust, 1 .85%, December 15, 2016 6 .1%Canada Housing Trust, 2 .75%, June 15, 2016 4 .2%Canada Housing Trust, 2 .05%, June 15, 2018 3 .0%
DESJARDINS OVERSEAS EQUITY GROWTH FUND 9.7%Tencent Holdings 4 .9%Inditex 4 .6%Fiat Chrysler Automobiles 4 .5%Baidu, ADR 4 .3%AIA Group 4 .2%
DFS GIF – GROWTH – MULTI-MANAGERS (cont.)
25DFS GUARANTEED INVESTMENT FUNDS
Security Name Percentage of Portfolio
DESJARDINS OVERSEAS EQUITY VALUE FUND 9.5%Novartis AG 4 .5%Roche Holding AG 4 .4%Japan Tobacco Inc . 3 .9%British American Tobacco 3 .9%Nestlé 3 .6%
BLACKROCK ACTIVE CANADIAN EQUITY DC FUND 8.7%Royal Bank of Canada 6 .5%Toronto-Dominion Bank 6 .3%Valeant Pharmaceuticals International 5 .6%Scotiabank 3 .9%Manulife Financial Corporation 3 .3%
FIDELITY TRUE NORTH ® FUND 8.6%Toronto-Dominion Bank 7 .2%Loblaw Companies 4 .6%Valeant Pharmaceuticals International 4 .1%Manulife Financial Corporation 4 .0%Canadian National Railway Company 3 .1%
FRANKLIN BISSETT CANADIAN EQUITY FUND 8.5%Brookfield Asset Management 5 .8%Canadian National Railway Company 4 .8%Toronto-Dominion Bank 4 .7%Canadian Imperial Bank of Commerce 4 .5%Royal Bank of Canada 4 .4%
TOP FIVE HOLDINGS OF THE UNDERLYING FUNDS – unaudited (cont.)
26 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment Objective
To emphasize appreciation of capital while still generating some income by investing in a number of different fixed income and equity underlying funds .
The principal risk factors of this Fund are interest rate, foreign currency, credit, sovereign, market, special equities and derivatives risk .
Investment Strategy
To invest in a wide array of underlying funds managed by using a multi-manager approach provided by acclaimed fund managers and sub-advisors .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 5,519,564 4,712,557 — 10,232,121 TOTAL 5,519,564 4,712,557 — 10,232,121
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 2,850,055 2,422,059 — 5,272,114 TOTAL 2,850,055 2,422,059 — 5,272,114
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Funds Risk ManagementMonthly, the investment strategy team compares the Funds’ performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Funds’ performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Funds’ investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Funds’ managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying funds . Detailed disclosure about the currency risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .
DFS GIF – GROWTH – MULTI-MANAGERS (cont.)
27DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying funds . Detailed disclosure about the interest rate risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .
Concentration Risk
As at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which are exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying funds . Detailed disclosure about the concentration risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which are exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying funds . Detailed disclosure about the price risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s best estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, with all other variables held constant, is as follows:
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmarks % $ $FTSE TMX Canada Universe (35%) 1 .00 36,029 18,517S&P/TSX (26%) 3 .00 80,293 41,266S&P 500 (19 .5%) 3 .00 60,220 30,949MSCI EAFE Net (19 .5%) 3 .00 60,220 30,949
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying funds . Detailed disclosure about the credit risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which are exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying funds . Detailed disclosure about the liquidity risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .
For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
28 DFS GUARANTEED INVESTMENT FUNDS
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 20,028 1,757 Investments at fair value through profit
or loss (FVTPL) 1,567,561 1,026,220 Premiums receivable 23,018 2,484
1,610,607 1,030,461
LIABILITIESCurrent LiabilitiesAccrued expenses 3,491 2,271 Withdrawals payable 53,992 128 Payable for securities purchased 18,544 209
76,027 2,608
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 1,534,580 1,027,853
NET ASSETS PER UNITSeries 6 5.47 5 .24 Series 7 5.51 5 .27
STATEMENT OF COMPREHENSIVE INCOME – unauditedPeriods Ended June 30
2015 2014*(6 months) (5 months)
$ $
INCOMEInterest for attribution purposes 4,026 1,242 Dividends 13,481 4,292 Changes in fair value:
Net realized gain (loss) on investments 4,900 61 Net unrealized gain (loss) on investments 27,402 7,774
49,809 13,369
EXPENSESManagement fees and guarantee charge 15,730 3,319 Operating expenses 1,434 282
17,164 3,601 Withholding taxes 715 —
17,879 3,601
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 31,930 9,768
DATA PER SERIESSERIES 6Increase (Decrease) in Net Assets
from Operations 31,010 9,741 - per unit 0.14 0 .14
Average number of units 226,214 68,960
SERIES 7Increase (Decrease) in Net Assets
from Operations 920 27 - per unit 0.24 0 .14
Average number of units 3,854 200
* Beginning of operations in February 2014.
DFS GIF – MAXIMUM GROWTH – MULTI-MANAGERS
29DFS GUARANTEED INVESTMENT FUNDS
The accompanying notes are an integral part of these financial statements.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Periods Ended June 302015 2014*
(6 months) (5 months)$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 1,027,853 —Increase (Decrease) in Net Assets
from operations attributable to contract owners 31,930 9,768
PremiumsSeries 6 541,167 465,145 Series 7 — 1,001
541,167 466,146
WithdrawalsSeries 6 (66,370) (1,049)Series 7 — —
(66,370) (1,049)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 1,534,580 474,865
STATEMENT OF CASH FLOWS – unauditedPeriods Ended June 30
2015 2014*(6 months) (5 months)
$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 31,930 9,768
Adjustments for:Net realized gain (loss) (4,900) (61)Net unrealized gain (loss) (27,402) (7,774)
Proceeds from sale/ maturity of investments 74,952 3,739
Investments purchased (583,991) (471,338)Accrued expenses 1,220 1,103 Payable for securities purchased 18,335 118
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES (489,856) (464,445)
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 520,633 466,011 Amounts paid on withdrawals (12,506) (1,037)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES 508,127 464,974
Increase (decrease) in cash/bank overdraft 18,271 529
Cash (bank overdraft), beginning of period 1,757 —
CASH (BANK OVERDRAFT), END OF PERIOD 20,028 529
SUPPLEMENTAL INFORMATION ON CASH FLOWS FROM/USED IN OPERATING ACTIVITIESInterest paid — 12
* Beginning of operations in February 2014.
30 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015
Number of Units Cost
Fair Value
$ $
INVESTMENT FUNDS (102.1%)Beutel Goodman Income Fund, I-Class 12,563 157,247 156,449 BlackRock Active Canadian Equity DC Fund 5,531 179,964 167,800 BlackRock CDN US Equity Index Fund, Class D 23,317 346,662 380,686 Desjardins Overseas Equity Growth Fund, I-Class 9,353 174,192 188,700 Desjardins Overseas Equity Value Fund, I-Class 12,364 187,954 185,163 DGIA Canadian Bond Fund 15,306 155,412 156,857 Fidelity True North® Fund, Series O 3,574 161,515 167,356 Franklin Bissett Canadian Equity Fund, Series O 1,247 167,849 164,550
TOTAL INVESTMENTS 1,530,795 1,567,561
OTHER NET ASSETS (-2.1%) (32,981)
NET ASSETS (100%) 1,534,580
The accompanying notes are an integral part of these financial statements.
TOP FIVE HOLDINGS OF THE UNDERLYING FUNDS – unaudited
Security Name Percentage of Portfolio
BLACKROCK CDN US EQUITY INDEX FUND 24.5%Apple 4 .0%Microsoft Corporation 2 .0%Exxon Mobil Corporation 1 .9%Johnson & Johnson 1 .5%General Electric Company 1 .5%
DESJARDINS OVERSEAS EQUITY GROWTH FUND 12.3%Tencent Holdings 4 .9%Inditex 4 .6%Fiat Chrysler Automobiles 4 .5%Baidu, ADR 4 .3%AIA Group 4 .2%
DESJARDINS OVERSEAS EQUITY VALUE FUND 12.1%Novartis AG 4 .5%Roche Holding AG 4 .4%Japan Tobacco Inc . 3 .9%British American Tobacco 3 .9%Nestlé 3 .6%
FIDELITY TRUE NORTH ® FUND 10.9%Toronto-Dominion Bank 7 .2%Loblaw Companies 4 .6%Valeant Pharmaceuticals International 4 .1%Manulife Financial Corporation 4 .0%Canadian National Railway Company 3 .1%
DFS GIF – MAXIMUM GROWTH – MULTI-MANAGERS (cont.)
31DFS GUARANTEED INVESTMENT FUNDS
Security Name Percentage of Portfolio
BLACKROCK ACTIVE CANADIAN EQUITY DC FUND 10.8%Royal Bank of Canada 6 .5%Toronto-Dominion Bank 6 .3%Valeant Pharmaceuticals International 5 .6%Scotiabank 3 .9%Manulife Financial Corporation 3 .3%
FRANKLIN BISSETT CANADIAN EQUITY FUND 10.7%Brookfield Asset Management 5 .8%Canadian National Railway Company 4 .8%Toronto-Dominion Bank 4 .7%Canadian Imperial Bank of Commerce 4 .5%Royal Bank of Canada 4 .4%
DGIA CANADIAN BOND FUND 10.2%Canada Housing Trust, 1 .95%, June 15, 2019 1 .9%Canada Housing Trust, 1 .85%, December 15, 2016 1 .6%Canada Housing Trust, 2 .35%, December 15, 2018 1 .5%Canada Housing Trust, 2 .05%, June 15, 2018 1 .4%Government of Canada, 5 .75%, June 1, 2033 1 .4%
BEUTEL GOODMAN INCOME FUND 10.2%Canada Housing Trust, 2 .05%, June 15, 2017 8 .7%Canada Housing Trust, 1 .70%, December 15, 2017 7 .4%Canada Housing Trust, 1 .85%, December 15, 2016 6 .1%Canada Housing Trust, 2 .75%, June 15, 2016 4 .2%Canada Housing Trust, 2 .05%, June 15, 2018 3 .0%
TOP FIVE HOLDINGS OF THE UNDERLYING FUNDS – unaudited (cont.)
32 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment Objective
To maximize the appreciation of capital while still generating some income by investing in a number of different fixed income and equity underlying funds .
The principal risk factors of this Fund are interest rate, foreign currency, credit, sovereign, market, special equities and derivatives risk .
Investment StrategyTo invest in a wide array of underlying funds managed by using a multi-manager approach provided by acclaimed fund managers and sub-advisors .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 862,218 705,343 — 1,567,561 TOTAL 862,218 705,343 — 1,567,561
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 559,982 466,238 — 1,026,220 TOTAL 559,982 466,238 — 1,026,220
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Funds Risk ManagementMonthly, the investment strategy team compares the Funds’ performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Funds’ performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Funds’ investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Funds’ managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying funds . Detailed disclosure about the currency risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .
DFS GIF – MAXIMUM GROWTH – MULTI-MANAGERS (cont.)
33DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying funds . Detailed disclosure about the interest rate risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which are exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying funds . Detailed disclosure about the concentration risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which are exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying funds . Detailed disclosure about the price risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s best estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, with all other variables held constant, is as follows:
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmarks % $ $FTSE TMX Canada Universe (20%) 1 .00 3,069 2,056S&P/TSX (32%) 3 .00 14,732 9,867S&P 500 (24%) 3 .00 11,049 7,401MSCI EAFE Net (24%) 3 .00 11,049 7,401
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying funds . Detailed disclosure about the credit risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in underlying funds which are exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying funds . Detailed disclosure about the liquidity risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
34 DFS GUARANTEED INVESTMENT FUNDS
DFS GUARANTEED INVESTMENT FUNDS
Individual Funds
36 DFS GUARANTEED INVESTMENT FUNDS
Income
DFS GIF – MONEY MARKET
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash — 122,167 Investments at fair value through profit
or loss (FVTPL) 29,677,720 28,327,264 Premiums receivable 312,690 51,455 Receivable for securities sold 20,821 —
30,011,231 28,500,886
LIABILITIESCurrent LiabilitiesBank overdraft 47,740 —Accrued expenses 33,886 32,231 Withdrawals payable 259,418 200,985 Payable for securities purchased — 112,980
341,044 346,196
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 29,670,187 28,154,690
NET ASSETS PER UNITSeries 1 6.64 6 .64 Series 3 6.65 6 .65 Series 5 6.82 6 .81 Series 6 5.02 5 .01 Series 7 5.06 5 .03 Series IGP 10.00 10 .00
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEInterest for attribution purposes 380,260 420,997 Revenue from securities lending
and repurchase transactions — 442 Changes in fair value:
Net realized gain (loss) on investments 173,668 (129,996)Net unrealized gain (loss) on investments (319,452) (56,815)
234,476 234,628
EXPENSESManagement fees and guarantee charge 130,763 128,263 Operating expenses 70,973 78,374
201,736 206,637
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 32,740 27,991
DATA PER SERIESSERIES 1Increase (Decrease) in Net Assets
from Operations (216) (246)- per unit — —
Average number of units 82,215 93,591
SERIES 3Increase (Decrease) in Net Assets
from Operations (1,281) (1,807)- per unit — —
Average number of units 450,370 586,315
SERIES 5Increase (Decrease) in Net Assets
from Operations 23,883 29,426 - per unit 0.01 0 .01
Average number of units 2,899,706 3,481,538
SERIES 6*Increase (Decrease) in Net Assets
from Operations 5,688 605 - per unit 0.01 0 .01
Average number of units 760,016 105,993
SERIES 7*Increase (Decrease) in Net Assets
from Operations 4,278 13 - per unit 0.02 —
Average number of units 187,461 7,840
SERIES IGP**Increase (Decrease) in Net Assets
from Operations 388 — - per unit — —
Average number of units 169,430 —
* Beginning of operations in February 2014.** Beginning of operations in November 2014.
37DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.** Beginning of operations in November 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 28,154,690 29,780,657 Increase (Decrease) in Net Assets
from operations attributable to contract owners 32,740 27,991
PremiumsSeries 1 600 978 Series 3 461,998 701,081 Series 5 4,196,513 5,133,447 Series 6* 4,704,081 1,319,913 Series 7* 989,659 168,517 Series IGP** 189,807 —
10,542,658 7,323,936
WithdrawalsSeries 1 (69,385) (33,248)Series 3 (330,712) (652,318)Series 5 (5,792,309) (6,631,850)Series 6* (1,524,245) (466,544)Series 7* (982,399) (166,716)Series IGP** (360,851) —
(9,059,901) (7,950,676)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 29,670,187 29,181,908
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 32,740 27,991
Adjustments for:Net realized gain (loss) (173,668) 129,996 Net unrealized gain (loss) 319,452 56,815
Proceeds from sale/ maturity of investments 4,490,006 57,678,447
Investments purchased (5,986,246) (57,069,937)Receivable for securities sold (20,821) —Cash guarantee received
for repurchase transactions — 101,781 Interest, dividends
and other receivables — 108,195 Accrued expenses 1,655 (1,438)Commitments related to repurchase
transactions — (101,781)Payable for securities purchased (112,980) —
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES (1,449,862) 930,069
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 10,281,423 6,764,014 Amounts paid on withdrawals (9,001,468) (7,918,778)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES 1,279,955 (1,154,764)
Increase (decrease) in cash/bank overdraft (169,907) (224,695)
Cash (bank overdraft), beginning of period 122,167 205,493
CASH (BANK OVERDRAFT), END OF PERIOD (47,740) (19,202)
SUPPLEMENTAL INFORMATION ON CASH FLOWS FROM/USED IN OPERATING ACTIVITIESInterest received — 529,192
The accompanying notes are an integral part of these financial statements.
38 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.0%)DGIA Money Market Fund 3,047,541 28,959,817 29,677,720
TOTAL INVESTMENTS 28,959,817 29,677,720
OTHER NET ASSETS (-0.0%) (7,533)
NET ASSETS (100%) 29,670,187
The accompanying notes are an integral part of these financial statements.
TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
Bank of Montreal, Floating Rate, April 10, 2017 8 .5%Manulife Financial Corporation, 4 .079%, August 20, 2015 7 .6%Toronto-Dominion Bank, 3 .367%, November 2, 2020 7 .5%OMERS Realty Corporation, 4 .75%, May 5, 2016 7 .3%Daimler Canada Finance, 2 .23%, April 18, 2016 7 .1%Scotiabank, 3 .61%, February 22, 2016 4 .8%National Bank of Canada, 2 .05%, January 11, 2016 4 .8%National Bank of Canada, 3 .58%, April 26, 2016 4 .4%Canadian Imperial Bank of Commerce, Floating Rate, June 14, 2016 4 .2%Royal Bank of Canada, Floating Rate, November 2, 2020 4 .0%Volkswagen Credit Canada, Floating rate, April 3, 2017 3 .8%BMW Canada, Floating Rate, February 24, 2017 3 .8%Volkswagen Credit Canada, Floating rate, August 19, 2015 3 .4%BMW Canada, 2 .11%, May 26, 2016 2 .9%Manitoba Treasury Bills, August 12, 2015 2 .8%Daimler Canada Finance, 2 .33%, September 14, 2015 2 .7%OMERS Finance Trust, Notes, August 17, 2015 1 .9%Ontario Hydro, Stripped, February 18, 2016 1 .6%Province of Manitoba, Stripped, March 5, 2016 1 .4%CI Investments, 3 .94%, December 14, 2015 1 .4%GE Capital Canada Funding Company, Stripped, June 1, 2016 1 .4%Ontario Treasury Bills, August 12, 2015 1 .4%Province of Ontario, Stripped, July 13, 2016 1 .0%Scotiabank, Floating Rate, March 11, 2016 0 .9%Royal Bank of Canada, Notes, July 31, 2015 0 .9%
Income
DFS GIF – MONEY MARKET (cont.)
39DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo provide a higher level of interest income than can normally be obtained from savings accounts, combined with a high level of liquidity and safety of capital .
Investment StrategyTo invest primarily in Canadian government treasury bills and in bankers’ acceptances, which have a maximum maturity of 12 months, and the dollar-weighted average term to maturity of the portfolio does not exceed 180 days .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds — 29 677 720 — 29 677 720 TOTAL — 29 677 720 — 29 677 720
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds — 28 327 264 — 28 327 264 TOTAL — 28 327 264 — 28 327 264
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk Management Monthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
40 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s best estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in the benchmark, with all other variables held constant, is as follows:
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmark % $ $FTSE TMX Canada 91 Day Treasury Bills 0 .25 74,175 70,387
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
Income
DFS GIF – MONEY MARKET (cont.)
41DFS GUARANTEED INVESTMENT FUNDS
Income
DFS GIF – INCOME – BEUTEL GOODMAN
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 11,321 —Investments at fair value through profit
or loss (FVTPL) 48,337,562 52,293,381 Premiums receivable 67,718 38,474 Receivable for securities sold 40,129 50,521
48,456,730 52,382,376
LIABILITIESCurrent LiabilitiesBank overdraft — 18,765 Accrued expenses 80,332 86,878 Withdrawals payable 247,381 116,682 Payable for securities purchased — 19,434
327,713 241,759
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 48,129,017 52,140,617
NET ASSETS PER UNITSeries 3 7.69 7 .70 Series 5 8.21 8 .18 Series 6 5.16 5 .14 Series 7 5.19 5 .15
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEInterest for attribution purposes 858,918 948,730 Changes in fair value:
Net realized gain (loss) on investments 325,257 (42,430)Net unrealized gain (loss) on investments (437,657) 1,061,348
746,518 1,967,648
EXPENSESManagement fees and guarantee charge 328,522 354,984 Operating expenses 175,423 195,048
503,945 550,032
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 242,573 1,417,616
DATA PER SERIESSERIES 3Increase (Decrease) in Net Assets
from Operations 247 119,362 - per unit — 0 .17
Average number of units 609,937 718,796
SERIES 5Increase (Decrease) in Net Assets
from Operations 245,257 1,292,709 - per unit 0.05 0 .21
Average number of units 5,248,293 6,135,079
SERIES 6*Increase (Decrease) in Net Assets
from Operations (2,610) 5,531 - per unit (0.01) 0 .07
Average number of units 394,115 81,702
SERIES 7*Increase (Decrease) in Net Assets
from Operations (321) 14 - per unit (0.02) 0 .07
Average number of units 16,315 200
* Beginning of operations in February 2014.
42 DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 52,140,617 55,835,991 Increase (Decrease) in Net Assets
from operations attributable to contract owners 242,573 1,417,616
PremiumsSeries 3 154,370 94,124 Series 5 1,737,523 2,427,191 Series 6* 1,121,443 755,114 Series 7* 130,597 1,001
3,143,933 3,277,430
WithdrawalsSeries 3 (481,644) (650,079)Series 5 (6,550,733) (6,322,143)Series 6* (347,559) (32,908)Series 7* (18,170) —
(7,398,106) (7,005,130)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 48,129,017 53,525,907
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 242,573 1,417,616
Adjustments for:Net realized gain (loss) (325,257) 42,430 Net unrealized gain (loss) 437,657 (1,061,348)
Proceeds from sale/ maturity of investments 4,244,681 3,855,345
Investments purchased (401,262) (569,351)Receivable for securities sold 10,392 84,277 Accrued expenses (6,546) (4,904)Payable for securities purchased (19,434) —
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES 4,182,804 3,764,065
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 3,114,689 3,280,571 Amounts paid on withdrawals (7,267,407) (6,977,780)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES (4,152,718) (3,697,209)
Increase (decrease) in cash/bank overdraft 30,086 66,856
Cash (bank overdraft), beginning of period (18,765) (81,679)
CASH (BANK OVERDRAFT), END OF PERIOD 11,321 (14,823)
Income
DFS GIF – INCOME – BEUTEL GOODMAN (cont.)
The accompanying notes are an integral part of these financial statements.
43DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.4%)Beutel Goodman Income Fund, I-Class 3,881,322 46,835,583 48,337,562
TOTAL INVESTMENTS 46,835,583 48,337,562
OTHER NET ASSETS (-0.4%) (208,545)
NET ASSETS (100%) 48,129,017
The accompanying notes are an integral part of these financial statements.
TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
Canada Housing Trust, 2 .05%, June 15, 2017 8 .7%Canada Housing Trust, 1 .70%, December 15, 2017 7 .4%Canada Housing Trust, 1 .85%, December 15, 2016 6 .1%Canada Housing Trust, 2 .75%, June 15, 2016 4 .2%Canada Housing Trust, 2 .05%, June 15, 2018 3 .0%Province of Ontario, 2 .60%, June 2, 2025 2 .7%Canada Housing Trust, 2 .75%, December 15, 2015 2 .3%Province of Ontario, 3 .15%, June 2, 2022 1 .6%Province of Ontario, 3 .50%, June 2, 2024 1 .6%Province of British Columbia, 2 .85%, June 18, 2025 1 .6%Toronto-Dominion Bank, 1 .824%, April 3, 2017 1 .3%Canadian Imperial Bank of Commerce, 2 .22%, March 7, 2018 1 .3%Province of Ontario, 2 .85%, June 2, 2023 1 .2%Province of Manitoba, 2 .45%, June 2, 2025 1 .1%TransCanada Pipelines, 8 .29%, February 5, 2026 1 .1%Nova Scotia Power, 5 .61%, June 15, 2040 1 .1%Westcoast Energy, 3 .28%, January 15, 2016 1 .0%Enbridge, 5 .33%, April 6, 2040 1 .0%Altalink, 5 .381%, March 26, 2040 1 .0%Province of Ontario, 4 .70%, June 2, 2037 1 .0%Royal Bank of Canada, 2 .364%, September 21, 2017 0 .9%Province of British Columbia, 3 .25%, December 18, 2021 0 .8%Province of British Columbia, 6 .35%, June 18, 2031 0 .8%Toronto-Dominion Bank, 2 .563%, June 24, 2020 0 .8%Royal Bank of Canada, 2 .58%, April 13, 2017 0 .8%
44 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo provide a high yield and reasonable stability of capital . This Fund will normally provide higher returns and better potential for capital gains and also some variability of performance during periods of rapidly changing interest rates . Income is reinvested to enhance long-term returns through compounding .
Investment StrategyTo include mainly investment grade Canadian federal, provincial government and corporate bonds, debentures, and short-term notes . The Fund may overweight its investment in high quality corporate and provincial issues which tend to perform better over time .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 48,337,562 — — 48,337,562 TOTAL 48,337,562 — — 48,337,562
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 52,293,381 — — 52,293,381 TOTAL 52,293,381 — — 52,293,381
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Income
DFS GIF – INCOME – BEUTEL GOODMAN (cont.)
45DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in the benchmark, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmark, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmark % $ $FTSE TMX Canada Universe 1 .00 359,276 378,727
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
46 DFS GUARANTEED INVESTMENT FUNDS
Income
DFS GIF – INCOME – FIERA
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsInvestments at fair value through profit
or loss (FVTPL) 86,597,962 80,835,560 Investments at fair value through profit
or loss (FVTPL) pledged as collateral 16,713,216 28,586,623 Premiums receivable 130,960 203,302 Receivable for securities sold 8,389,622 2,305,571 Cash guarantee received for repurchase
transactions 15,846,248 28,381,328 Interest, dividends and other receivables 495,401 619,634
128,173,409 140,932,018
LIABILITIESCurrent LiabilitiesBank overdraft 87,778 15,642 Accrued expenses 178,552 186,064 Withdrawals payable 451,657 303,797 Payable for securities purchased 5,837,502 2,281,104 Commitments related to repurchase
transactions 15,846,248 28,381,328 22,401,737 31,167,935
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 105,771,672 109,764,083
NET ASSETS PER UNITSeries 1 10.19 10 .11 Series 3 10.72 10 .63 Series 5 11.23 11 .09 Series 6 5.29 5 .22 Series 7 5.33 5 .24
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEInterest for attribution purposes 1,694,341 2,038,686 Revenue from securities lending
and repurchase transactions 10,058 11,618 Changes in fair value:
Net realized gain (loss) on investments 2,361,082 2,459,402 Net unrealized gain (loss) on investments (1,594,927) 1,731,613
2,470,554 6,241,319
EXPENSESManagement fees and guarantee charge 738,237 812,531 Operating expenses 373,634 421,352
1,111,871 1,233,883
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 1,358,683 5,007,436
DATA PER SERIESSERIES 1Increase (Decrease) in Net Assets
from Operations 23,880 126,283 - per unit 0.08 0 .36
Average number of units 293,573 353,673
SERIES 3Increase (Decrease) in Net Assets
from Operations 77,727 374,638 - per unit 0.10 0 .40
Average number of units 761,229 943,756
SERIES 5Increase (Decrease) in Net Assets
from Operations 1,235,823 4,501,508 - per unit 0.15 0 .45
Average number of units 8,390,153 10,087,151
SERIES 6*Increase (Decrease) in Net Assets
from Operations 20,703 4,986 - per unit 0.03 0 .12
Average number of units 618,887 43,333
SERIES 7*Increase (Decrease) in Net Assets
from Operations 550 21 - per unit 0.03 0 .10
Average number of units 17,237 200
* Beginning of operations in February 2014.
47DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unauditedSix-month Periods Ended June 30
2015 2014$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 109,764,083 128,710,520 Increase (Decrease) in Net Assets
from operations attributable to contract owners 1,358,683 5,007,436
PremiumsSeries 1 43,080 198,330 Series 3 402,633 333,763 Series 5 3,201,716 3,593,047 Series 6* 1,726,992 508,396 Series 7* 93,839 1,001
5,468,260 4,634,537
WithdrawalsSeries 1 (180,108) (497,488)Series 3 (1,157,094) (1,780,555)Series 5 (9,137,035) (21,924,164)Series 6* (344,424) (14,223)Series 7* (693) —
(10,819,354) (24,216,430)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 105,771,672 114,136,063
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 1,358,683 5,007,436
Adjustments for:Net realized gain (loss) (2,361,082) (2,459,402)Net unrealized gain (loss) 1,594,927 (1,731,613)
Proceeds from sale/ maturity of investments 125,517,025 139,007,315
Investments purchased (118,639,939) (120,276,954)Receivable for securities sold (6,084,051) 3,292,693 Cash guarantee received
for repurchase transactions 12,535,080 11,663,119 Interest, dividends and
other receivables 124,233 205,458 Accrued expenses (7,512) (28,397)Commitments related to
repurchase transactions (12,535,080) (11,663,119)Payable for securities purchased 3,556,398 (2,143,910)
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES 5,058,682 20,872,626
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 5,540,602 4,694,936 Amounts paid on withdrawals (10,671,494) (24,564,348)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES (5,130,892) (19,869,412)
Effect of exchange rate changes on foreign cash 74 3
Increase (decrease) in cash/bank overdraft (72,136) 1,003,217
Cash (bank overdraft), beginning of period (15,642) (130,895)
CASH (BANK OVERDRAFT), END OF PERIOD (87,778) 872,322
SUPPLEMENTAL INFORMATION ON CASH FLOWS FROM/USED IN OPERATING ACTIVITIESInterest received 1,818,573 2,244,142
The accompanying notes are an integral part of these financial statements.
48 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015 Par Fair Value Cost Value $ $
BONDS (94.8%)
Government of Canada (18.7%)Broadcast Center Trust 7 .530%, 2027-05-01 CAD 190,306 187,781 253,499 Government of Canada 1 .250%, 2017-08-01 CAD 4,245,000 4,306,714 4,312,106 1 .500%, 2023-06-01* CAD 1,799,000 1,803,833 1,802,313 2 .250%, 2025-06-01* CAD 3,008,000 3,125,624 3,162,795 5 .750%, 2033-06-01* CAD 130,000 208,715 198,944 3 .500%, 2045-12-01* CAD 5,647,000 6,983,846 7,112,675 PSP Capital Series 7, 3 .290%, 2024-04-04 CAD 345,000 330,135 371,404 Royal Office Finance Series A, 5 .209%, 2032-11-12 CAD 2,020,105 1,832,094 2,510,619
18,778,742 19,724,355
Provincial Governments and Crown Corporations (33.4%)New Brunswick (F-M) Project Company 6 .470%, 2027-11-30 CAD 486,395 509,485 610,446 Ontario Infrastructure 4 .700%, 2037-06-01 CAD 80,000 71,858 94,630 Ontario School Boards Financing Corporation Series 00A1, 7 .200%, 2025-06-09 CAD 2,628,815 2,805,768 3,341,627 Series 01A3, 6 .550%, 2026-10-19 CAD 1,643 1,683 2,046 Private Placement, Series 06A1, 5 .070%, 2031-04-18 CAD 540,367 484,775 620,350 Ornge Issuer Trust 5 .727%, 2034-06-11 CAD 277,520 254,101 325,279 Province of Alberta 3 .900%, 2033-12-01 CAD 1,440,000 1,360,661 1,623,248 3 .450%, 2043-12-01 CAD 526,000 460,310 556,036 Province of British Columbia 3 .200%, 2044-06-18 CAD 640,000 565,375 651,884 Province of Ontario 4 .400%, 2019-06-02 CAD 1,632,000 1,708,860 1,833,667 3 .150%, 2022-06-02* CAD 1,384,000 1,325,294 1,493,301 2 .850%, 2023-06-02 CAD 8,164,000 7,368,657 8,567,883 3 .500%, 2024-06-02 CAD 3,625,000 3,612,133 3,962,278 2 .600%, 2025-06-02 CAD 2,056,000 2,134,078 2,081,323 3 .500%, 2043-06-02 CAD 302,000 268,752 318,606 3 .450%, 2045-06-02 CAD 1,402,000 1,298,113 1,472,405 Province of Québec 4 .500%, 2019-12-01 CAD 2,990,000 3,142,991 3,402,569 2 .750%, 2025-09-01 CAD 1,133,000 1,197,362 1,158,604 4 .250%, 2043-12-01* CAD 796,000 777,244 943,433 3 .500%, 2045-12-01 CAD 969,000 834,221 1,018,680 TCHC Issuer Trust 4 .877%, 2037-05-11 CAD 287,000 238,639 340,982 Series B, 5 .395%, 2040-02-22 CAD 690,000 637,841 897,769
31,058,201 35,317,046
* Securities pledged as collateral, in part or in whole, through the securities lending program.
DFS GIF – INCOME – FIERA (cont.)
Income
49DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015 Par Fair Value Cost Value $ $
BONDS (cont.)
Municipalities and Semi-Public Institutions (6.7%)Municipality of St-Lambert-de-Lauzon 2 .600%, 2015-11-16 CAD 1,400,000 1,264,211 1,405,362 Société de transport de l’Outaouais 3 .000%, 2015-12-07 CAD 400,000 365,810 402,472 Town of Brome Lake 2 .500%, 2015-11-09 CAD 200,000 179,798 200,955 Town of Rosemère 2 .700%, 2015-11-23 CAD 1,000,000 907,050 1,004,810 Ville de Beloeil 3 .000%, 2015-12-07 CAD 1,000,000 914,480 1,006,210 Ville de Blainville 2 .500%, 2015-11-09 CAD 525,000 471,966 527,515 Ville de Mont-Saint-Hilaire 3 .000%, 2015-11-30 CAD 960,000 875,728 966,163 Ville de Saint-Georges 2 .500%, 2015-11-09 CAD 550,000 494,446 552,597 Ville de Saint-Jérôme 3 .000%, 2015-12-08 CAD 1,013,000 920,138 1,021,092
6,393,627 7,087,176
Corporations (36.0%)Bank of Montreal 2 .960%, 2016-08-02 CAD 955,000 895,190 973,869 2 .390%, 2017-07-12 CAD 1,680,000 1,586,377 1,719,298 2 .240%, 2017-12-11 CAD 1,500,000 1,423,567 1,534,410 3 .120%, (floating rate from 2019-09-19), 2024-09-19* CAD 687,000 672,406 710,827 Blackbird Infrastructure 407 General Partners 1 .713%, (floating rate from 2020-01-08), 2021-10-08 CAD 229,000 227,216 229,043 Caisse centrale Desjardins 2 .443%, 2019-07-17 CAD 1,090,000 1,045,662 1,128,363 Canadian Imperial Bank of Commerce 1 .750%, 2016-06-01 CAD 277,000 265,172 278,798 2 .350%, 2017-10-18* CAD 3,635,000 3,473,468 3,724,439 2 .350%, 2019-06-24 CAD 56,000 53,675 57,951 3 .000%, (floating rate from 2019-10-28), 2024-10-28* CAD 708,000 709,676 729,669 Canadian Utilities 4 .543%, 2041-10-24 CAD 230,000 212,567 254,892 Capital City Link Series A, 4 .386%, 2046-03-31 CAD 847,000 759,585 891,428 Cominar Real Estate Investment Trust Series 9, 4 .164%, 2022-06-01 CAD 645,000 645,000 649,997 CSS (FSCC) Partnership 6 .915%, 2042-07-31 CAD 89,420 101,312 119,389 Enbridge 3 .940%, 2023-06-30 CAD 425,000 401,286 442,794 7 .220%, 2030-07-24 CAD 150,000 157,438 189,382 7 .200%, 2032-06-18 CAD 546,000 646,043 697,407 Health Montréal Collective, Private Placement Series 144A, 6 .721%, 2049-09-30 CAD 1,370,000 1,575,576 1,801,985 Hospital Infrastructure Series A, 5 .439%, 2045-01-31 CAD 630,000 579,728 749,875
* Securities pledged as collateral, in part or in whole, through the securities lending program.
50 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015 Par Fair Value Cost Value $ $
Corporations (cont.)Integrated Team Solutions SJHC 5 .946%, 2042-11-30 CAD 205,000 189,479 253,654 North West Redwater Partnership Series A, 3 .200%, 2024-07-22 CAD 505,000 484,491 522,515 Northland Power Series A, 4 .958%, 2032-12-31 CAD 521,745 497,343 593,605 Plenary Properties 6 .288%, 2044-01-31 CAD 847,495 822,428 1,109,071 Reliance Series 2, 5 .187%, 2019-03-15 CAD 394,000 371,084 423,162 Royal Bank of Canada 2 .364%, 2017-09-21 CAD 1,277,000 1,206,719 1,306,730 2 .260%, 2018-03-12 CAD 515,000 486,798 527,124 2 .820%, 2018-07-12 CAD 510,000 487,943 531,368 2 .860%, 2021-03-04 CAD 8,000 7,670 8,362 3 .040%, (floating rate from 2019-07-17), 2024-07-17 CAD 580,000 556,195 600,000 2 .990%, (floating rate from 2019-12-06), 2024-12-06 CAD 1,300,000 1,225,418 1,356,341 2 .480%, (floating rate from 2020-06-04), 2025-06-04 CAD 895,000 894,830 893,342 Scotiabank 2 .370%, 2018-01-11 CAD 1,785,000 1,701,371 1,831,038 2 .242%, 2018-03-22 CAD 916,000 865,789 937,256 3 .270%, 2021-01-11 CAD 1,155,000 1,111,928 1,231,322 2 .898%, (floating rate from 2017-08-03), 2022-08-03 CAD 859,000 819,724 882,994 SNC-Lavalin Innisfree McGill Finance 6 .632%, 2044-06-30 CAD 406,591 429,211 531,265 Teranet Income Fund 5 .754%, 2040-12-17 CAD 780,000 756,023 865,833 6 .100%, 2041-06-17 CAD 964,000 917,870 1,099,711 Toronto-Dominion Bank 2 .447%, 2019-04-02 CAD 1,030,000 987,994 1,067,279 2 .563%, 2020-06-24 CAD 325,000 311,762 336,346 3 .226%, 2024-07-24 CAD 468,000 451,175 488,371 2 .692%, (floating rate from 2020-06-24), 2025-06-24 CAD 516,000 516,000 519,734 4 .779%, (floating rate from 2016-12-14), 2105-12-14 CAD 125,000 91,908 130,721 5 .763%, (floating rate from 2017-12-18), 2106-12-18 CAD 1,906,000 1,986,221 2,096,361 TransCanada PipeLines 6 .890%, 2028-08-07 CAD 500,000 409,578 646,388 8 .050%, 2039-02-17 CAD 278,000 413,856 429,513
34,431,752 38,103,222
TOTAL BONDS 90,662,322 100,231,799
DFS GIF – INCOME – FIERA (cont.)
Income
51DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015 Par Fair Value Cost Value $ $
MORTGAGE-BACKED SECURITIES (1.6%)Column Canada Issuer Corporation 4 .934%, 2016-09-15 CAD 322,000 346,941 332,857 Merrill Lynch Financial Assets 4 .826%, 2016-02-12 CAD 400,000 348,884 405,265 4 .642%, 2016-10-12 CAD 670,000 295,844 330,439 Series 2007-CA22, Class A3, 4 .878%, 2017-04-12 CAD 250,000 229,000 263,329 Merrill Lynch Mortgage Loans 4 .711%, 2016-11-12 CAD 1,625,000 269,593 298,490 Real Estate Asset Liquidity Trust 4 .449%, 2016-08-12 CAD 500,000 83,982 93,171
TOTAL MORTGAGE-BACKED SECURITIES 1,574,244 1,723,551
MONEY MARKET SECURITIES (0.7%)Canada Treasury Bills 2015-09-10 CAD 145,000 144,810 144,810 Ontario Treasury Bills 2015-08-19 CAD 550,000 549,280 549,280
TOTAL MONEY MARKET SECURITIES 694,090 694,090
ASSET-BACKED SECURITIES (0.6%)CHIP Mortgage Trust 3 .663%, 2038-09-25 CAD 626,000 598,829 661,738
TOTAL INVESTMENTS (97.7%) 93,529,485 103,311,178
OTHER NET ASSETS (2.3%) 2,460,494
NET ASSETS (100%) 105,771,672
The accompanying notes are an integral part of these financial statements.
52 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo provide above-average interest income with some potential for capital growth by investing primarily in bonds and other interest-bearing instruments of Canadian federal and provincial governments and investment-grade corporations .
Investment StrategyTo place emphasis primarily on medium and long-term maturities . Such maturities normally provide higher returns and better potential for capital gains but also higher variability of performance during periods of rapidly changing interest rates .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies” section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLBonds 50,466,932 49,764,867 — 100,231,799 Mortgage-Backed Securities — 1,723,551 — 1,723,551 Asset-Backed Securities — 661,738 — 661,738 Money Market Securities 694,090 — — 694,090 TOTAL 51,161,022 52,150,156 — 103,311,178
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLBonds 49,751,571 56,464,701 — 106,216,272 Mortgage-Backed Securities — 1,861,862 — 1,861,862 Asset-Backed Securities — 650,031 — 650,031 Money Market Securities 694,018 — — 694,018 TOTAL 50,445,589 58,976,594 — 109,422,183
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Fund’s financial assets and liabilities are denominated in Canadian dollars . As a result, the Fund is not significantly exposed to currency risk .
Interest Rate RiskThe following table summarizes the Fund’s exposure to interest rate risk . It includes the Fund’s financial assets and liabilities at fair value, categorized by the earlier of contractual re-pricing or maturity dates . The table also illustrates the impact on the Net Assets Attributable to Contract Owners, had prevailing interest rates changed by 0 .25%, assuming a parallel shift in the yield curve, with all other variables held constant .
DFS GIF – INCOME – FIERA (cont.)
Income
53DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Less than 1 Year 1 to 5 Years 5 to 10 Years
Greater than 10 Years Total
Impact on Net Assets
Attributable to Contract Owners
$ $ $ $ $ $June 30, 2015 8,377,551 35,114,293 28,126,285 31,605,271 103,223,400 1,855,311
December 31, 2014 7,857,575 48,201,649 18,927,386 34,419,931 109,406,541 1,772,037
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Concentration RiskThe following table summarizes the concentration risk, as in percentages of the Net Assets Attributable to Contract Owners:
June 30, 2015 December 31, 2014MARKET SEGMENT % MARKET SEGMENT %Bonds Bonds
Corporations 36 .0 Corporations 40 .7Provincial Governments and Crown Corporations 33 .4 Provincial Governments and Crown Corporations 32 .1Government of Canada 18 .7 Government of Canada 17 .5Municipalities and Semi-Public Institutions 6 .7 Municipalities and Semi-Public Institutions 6 .5
Mortgage-Backed Securities 1 .6 Mortgage-Backed Securities 1 .7Money Market Securities 0 .7 Money Market Securities 0 .6Asset-Backed Securities 0 .6 Asset-Backed Securities 0 .6Other Net Assets 2 .3 Other Net Assets 0 .3TOTAL 100 TOTAL 100
Price RiskThe Fund may trade in financial instruments and take positions in over-the-counter instruments .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in the benchmark, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmark, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in Price Impact on Net Assets Attributable to
Contract Owners
June 30, 2015 December 31, 2014Benchmark % $ $FTSE TMX Canada Universe 1 .00 1,003,594 1,143,385
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
54 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Credit RiskThe Fund’s credit risk is mainly concentrated in fixed-income securities . Their fair values include consideration of the issuers’ creditworthiness and accordingly, represent the Fund’s maximum exposure to credit risk .
The investment grade for Canadian fixed-income securities and money market securities is rated by the Dominion Bond Rating Service (“DBRS”), Standard & Poor’s or Moody’s . The investment grade for foreign fixed-income securities and money market securities is rated by Standard & Poor’s, Moody’s or Fitch . In cases where the credit rating agencies do not agree on a credit rating for fixed-income securities and money market securities, they will be classified following these rules:• If two credit ratings are available, but the ratings are different, the lowest rating is used;• If three credit ratings are available, the most common credit rating is used;• If all three credit rating agencies have different ratings, the middle credit rating is used .The credit rating is then converted to DBRS format . Generally, the greater the credit rating of a security, the lower the probability of it defaulting on its obligations .
Portfolio’s fixed-income securities by credit rating category
Credit rating Percentage of Fixed-Income SecuritiesJune 30, 2015 December 31, 2014
% %AAA 24 24 AA 42 41 A 19 21 BBB 8 7 Not Rated 7 7 TOTAL 100 100
Securities Lending and Repurchase TransactionsAs part of its securities lending and repurchase transactions, the Fund is exposed to counterparty credit risk . The carrying amount of financial assets pledged as collateral for liabilities is:
$June 30, 2015 15,878,198 December 31, 2014 27,220,076
The fair value of the financial assets held as collateral that the fund is permitted to sell or repledge in the absence of default totalled:
$June 30, 2015 10,382,651 December 31, 2014 17,800,940
The fair value of financial assets accepted as collateral which have been sold or repledged totalled:
$June 30, 2015 4,539 December 31, 2014 947,491
These financial assets were received as collateral as part of transactions involving reverse repurchase transactions .
Liquidity RiskFor further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
DFS GIF – INCOME – FIERA (cont.)
Income
55DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
DERECOGNITION OF FINANCIAL ASSETS
Securities lending and repurchase transactionsAs part of transactions involving securities lending or repurchase transactions, the Fund transfers financial assets under terms and conditions providing for their future repurchase . These financial assets remain recognized in the “Investments at fair value through profit or loss pledged as collateral” of the Statement of Financial Position as the Fund retains substantially all the risks and rewards related to these assets .
June 30, 2015 December 31, 2014$ $
Investments at FVTPL pledged as Collateral 16,713,216 28,586,623 Value of Collateral Securities 17,047,481 29,158,490
The Funds require collateral in the form of cash or such other securities as may be acceptable to Desjardins Financial Security and that have an aggregate value of no less than 102% of the loaned securities fair value .
The following table presents the carrying amount and the fair value of financial assets transferred by the Fund but not derecognized as well as the related liabilities recognized in “Commitments related to repurchase transactions” and “Commitments related to securities lending” of the Statement of Financial Position .
Fair Value*June 30, 2015 December 31, 2014
$ $Financial Assets 15,878,198 27,220,076 Related Liabilities 15,842,856 27,434,695
* The fair value equals carrying amount .
56 DFS GUARANTEED INVESTMENT FUNDS
DFS GIF – DIVERSIFIED INCOME – QUOTENTIAL
Balanced and Asset Allocation
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 54,101 —Investments at fair value through profit
or loss (FVTPL) 191,922,358 187,413,795 Premiums receivable 123,405 144,666 Receivable for securities sold — 47,667
192,099,864 187,606,128
LIABILITIESCurrent LiabilitiesBank overdraft — 28,347 Accrued expenses 463,651 450,353 Withdrawals payable 523,936 288,410 Payable for securities purchased 77,631 109,796
1,065,218 876,906
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 191,034,646 186,729,222
NET ASSETS PER UNITSeries 3 7.30 7 .11Series 5 7.42 7 .22Series 6 5.25 5 .10Series 7 5.29 5 .13
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEInterest for attribution purposes — (847)Changes in fair value:
Net realized gain (loss) on investments 1,797,657 1,882,639 Net unrealized gain (loss) on investments 6,228,614 6,855,728
8,026,271 8,737,520
EXPENSESManagement fees and guarantee charge 2,247,188 2,125,360 Operating expenses 558,861 549,257
2,806,049 2,674,617
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 5,220,222 6,062,903
DATA PER SERIESSERIES 3Increase (Decrease) in Net Assets
from Operations 183,003 224,388 - per unit 0.20 0 .22
Average number of units 901,977 999,588
SERIES 5Increase (Decrease) in Net Assets
from Operations 4,889,857 5,833,478 - per unit 0.21 0 .24
Average number of units 23,380,042 24,816,971
SERIES 6*Increase (Decrease) in Net Assets
from Operations 150,496 5,025 - per unit 0.07 0 .05
Average number of units 2,028,406 106,542
SERIES 7*Increase (Decrease) in Net Assets
from Operations (3,134) 12 - per unit (0.05) 0 .06
Average number of units 57,775 200
* Beginning of operations in February 2014.
57DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 186,729,222 180,940,125 Increase (Decrease) in Net Assets
from operations attributable to contract owners 5,220,222 6,062,903
PremiumsSeries 3 569,455 981,206 Series 5 8,399,633 9,216,732 Series 6* 6,843,648 1,754,104 Series 7* 601,340 1,001
16,414,076 11,953,043
WithdrawalsSeries 3 (816,788) (1,359,872)Series 5 (15,724,963) (15,043,312)Series 6* (786,274) (16,392)Series 7* (849) —
(17,328,874) (16,419,576)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 191,034,646 182,536,495
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 5,220,222 6,062,903
Adjustments for:Net realized gain (loss) (1,797,657) (1,882,639)Net unrealized gain (loss) (6,228,614) (6,855,728)
Proceeds from sale/ maturity of investments 6,840,986 9,065,979
Investments purchased (3,323,278) (1,940,546)Receivable for securities sold 47,667 232,459 Accrued expenses 13,298 6,303 Payable for securities purchased (32,165) 99,134
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES 740,459 4,787,865
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 16,435,337 11,539,388 Amounts paid on withdrawals (17,093,348) (16,032,595)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES (658,011) (4,493,207)
Increase (decrease) in cash/bank overdraft 82,448 294,658
Cash (bank overdraft), beginning of period (28,347) (377,259)
CASH (BANK OVERDRAFT), END OF PERIOD 54,101 (82,601)
SUPPLEMENTAL INFORMATION ON CASH FLOWS FROM/USED IN OPERATING ACTIVITIESInterest paid — 847
The accompanying notes are an integral part of these financial statements.
58 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.5%)Franklin Quotential Diversified Income Portfolio 25,555,574 153,524,220 191,922,358
TOTAL INVESTMENTS 153,524,220 191,922,358
OTHER NET ASSETS (-0.5%) (887,712)
NET ASSETS (100%) 191,034,646
The accompanying notes are an integral part of these financial statements.
TOP HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
Franklin Bissett Core Plus Bond Fund 26 .9%Franklin Bissett Canadian Short Term Bond Fund 10 .0%Templeton Global Bond Fund 9 .4%Cash and Cash Equivalents 7 .2%BMO Mid Federal Bond Index ETF 6 .8%iShares Intermediate Credit Bond ETF 5 .5%Franklin Mutual European Fund 5 .4%Franklin Strategic Income Fund 5 .3%Franklin U .S . Rising Dividends Fund 3 .9%Franklin Bissett Canadian Dividend Fund 3 .2%Templeton Emerging Markets Fund 2 .9%Franklin Bissett Canadian High Dividend Fund 2 .5%Franklin U .S . Core Equity Fund 2 .1%Franklin Global Real Estate Fund 1 .9%WisdomTree Australia & New Zealand Debt ETF 1 .9%WisdomTree Japan Hedged Equity ETF 1 .2%Franklin Bissett Canadian Equity Fund 1 .2%Franklin Japan Fund 1 .0%SPDR Euro Stoxx 50 ETF 0 .9%iShares MSCI Japan ETF 0 .8%
DFS GIF – DIVERSIFIED INCOME – QUOTENTIAL (cont.)
Balanced and Asset Allocation
59DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo provide a balance of capital growth and interest income by investing primarily in units of an underlying fund in order to gain the desired exposure to the equity and fixed income markets .
Investment StrategyTo emphasize investments in fixed income underlying funds in order to provide income and capital preservation . The Fund also invests, to a lesser extent, in equity underlying funds in order to increase the potential for capital appreciation over a longer investment horizon .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 191,922,358 — — 191,922,358 TOTAL 191,922,358 — — 191,922,358
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 187,413,795 — — 187,413,795 TOTAL 187,413,795 — — 187,413,795
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
60 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmarks, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmarks % $ $FTSE TMX Canada Universe (55%) 1 .00 1,064,834 861,568Barclays Capital Multiverse (Hedged) (25%) 1 .00 484,015 391,622S&P/TSX (15%) 3 .00 871,228 704,919MSCI All Country World Net (5%) 3 .00 290,409 234,973
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
DFS GIF – DIVERSIFIED INCOME – QUOTENTIAL (cont.)
Balanced and Asset Allocation
61DFS GUARANTEED INVESTMENT FUNDS
Balanced and Asset Allocation
The accompanying notes are an integral part of these financial statements.
DFS GIF – BALANCED INCOME – QUOTENTIAL
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 151,566 31,643 Investments at fair value through profit
or loss (FVTPL) 258,614,364 251,518,702 Premiums receivable 236,670 244,708 Receivable for securities sold 24,365 122,009
259,026,965 251,917,062
LIABILITIESCurrent LiabilitiesAccrued expenses 635,255 614,158 Withdrawals payable 624,647 423,546 Payable for securities purchased 96,345 7,805
1,356,247 1,045,509
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 257,670,718 250,871,553
NET ASSETS PER UNITSeries 3 6.75 6 .43 Series 5 6.90 6 .57 Series 6 5.44 5 .17 Series 7 5.47 5 .19
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEChanges in fair value:
Net realized gain (loss) on investments 3,499,632 2,406,934 Net unrealized gain (loss) on investments 13,291,250 10,655,540
16,790,882 13,062,474
EXPENSESManagement fees and guarantee charge 3,072,497 2,929,600 Operating expenses 777,422 755,535
3,849,919 3,685,135
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 12,940,963 9,377,339
DATA PER SERIESSERIES 3Increase (Decrease) in Net Assets
from Operations 526,192 399,267 - per unit 0.33 0 .23
Average number of units 1,571,940 1,739,682
SERIES 5Increase (Decrease) in Net Assets
from Operations 12,087,918 8,953,612 - per unit 0.35 0 .24
Average number of units 34,936,218 37,405,848
SERIES 6*Increase (Decrease) in Net Assets
from Operations 225,638 19,343 - per unit 0.19 0 .12
Average number of units 1,177,240 156,880
SERIES 7*Increase (Decrease) in Net Assets
from Operations 101,215 5,117 - per unit 0.26 0 .07
Average number of units 382,293 71,777
* Beginning of operations in February 2014.
62 DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 250,871,553 244,860,657 Increase (Decrease) in Net Assets
from operations attributable to contract owners 12,940,963 9,377,339
PremiumsSeries 3 606,320 805,371 Series 5 10,351,221 8,109,319 Series 6* 3,611,825 1,672,031 Series 7* 562,279 514,441
15,131,645 11,101,162
WithdrawalsSeries 3 (1,195,137) (1,491,223)Series 5 (19,854,643) (13,354,796)Series 6* (204,163) (11,826)Series 7* (19,500) (816)
(21,273,443) (14,858,661)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 257,670,718 250,480,497
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 12,940,963 9,377,339
Adjustments for:Net realized gain (loss) (3,499,632) (2,406,934)Net unrealized gain (loss) (13,291,250) (10,655,540)
Proceeds from sale/ maturity of investments 9,779,679 8,436,679
Investments purchased (84,459) (1,086,554)Receivable for securities sold 97,644 289,650 Accrued expenses 21,097 21,004 Payable for securities purchased 88,540 87,466
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES 6,052,582 4,063,110
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 15,139,683 11,017,954 Amounts paid on withdrawals (21,072,342) (14,851,242)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES (5,932,659) (3,833,288)
Increase (decrease) in cash/bank overdraft 119,923 229,822
Cash (bank overdraft), beginning of period 31,643 (162,536)
CASH (BANK OVERDRAFT), END OF PERIOD 151,566 67,286
The accompanying notes are an integral part of these financial statements.
DFS GIF – BALANCED INCOME – QUOTENTIAL (cont.)
Balanced and Asset Allocation
63DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.4%)Franklin Quotential Balanced Income Portfolio 25,784,084 181,695,061 258,614,364
TOTAL INVESTMENTS 181,695,061 258,614,364
OTHER NET ASSETS (-0.4%) (943,646)
NET ASSETS (100%) 257,670,718
The accompanying notes are an integral part of these financial statements.
TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
Franklin Bissett Core Plus Bond Fund 29 .2%Templeton Global Bond Fund 7 .9%Franklin U .S . Core Equity Fund 4 .6%SPDR Euro Stoxx 50 ETF 4 .4%Templeton Asian Growth Fund 4 .3%Franklin Mutual European Fund 4 .2%Franklin Bissett Canadian Equity Fund 4 .2%Franklin Strategic Income Fund 3 .8%Franklin Flex Cap Growth Fund 3 .5%Franklin U .S . Rising Dividends Fund 3 .4%Franklin Bisset All Canadian Focus Fund 3 .4%iShares Intermediate Credit Bond ETF 2 .9%BMO Mid Federal Bond Index ETF 2 .3%Franklin Templeton Canadian Large Cap Fund 2 .2%WisdomTree Japan Hedged Equity ETF 2 .2%iShares MSCI Japan ETF 1 .8%WisdomTree Australia & New Zealand Debt ETF 1 .4%Franklin Bissett Small Cap Fund 1 .4%Franklin European Small-Mid Cap Growth Fund 1 .3%Franklin World Growth Fund 1 .1%Franklin Japan Fund 1 .1%iShares MSCI Japan Small-Cap ETF 0 .9%iShares MSCI China ETF 0 .6%iShares Russell 1000 Value ETF 0 .6%Templeton Frontier Markets Fund 0 .6%
64 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo provide a balance of capital growth and interest income by investing primarily in units of an individual underlying fund in order to gain the desired exposure to the equity and fixed income markets .
Investment StrategyTo invest in fixed income underlying funds in order to provide income and capital preservation . The Fund also invests in equity underlying funds in order to increase the potential for capital appreciation over a longer investment horizon .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 258,614,364 — — 258,614,364 TOTAL 258,614,364 — — 258,614,364
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 251,518,702 — — 251,518,702 TOTAL 251,518,702 — — 251,518,702
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
DFS GIF – BALANCED INCOME – QUOTENTIAL (cont.)
Balanced and Asset Allocation
65DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmarks, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmarks % $ $FTSE TMX Canada Universe (45%) 1 .00 1,181,563 1,189,381Barclays Capital Multiverse (Hedged) (15%) 1 .00 393,854 396,460S&P/TSX (20%) 3 .00 1,575,417 1,585,842MSCI All Country World Net (20%) 3 .00 1,575,417 1,585,842
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
66 DFS GUARANTEED INVESTMENT FUNDS
The accompanying notes are an integral part of these financial statements.
DFS GIF – CANADIAN BALANCED – FIDELITY
Balanced and Asset Allocation
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 173,907 104,454 Investments at fair value through profit
or loss (FVTPL) 915,155,684 884,369,956 Premiums receivable 1,231,878 265,935 Receivable for securities sold 96,506 201,296
916,657,975 884,941,641
LIABILITIESCurrent LiabilitiesAccrued expenses 2,255,737 2,156,493 Withdrawals payable 2,294,920 1,165,334 Payable for securities purchased 64,034 22,793
4,614,691 3,344,620
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 912,043,284 881,597,021
NET ASSETS PER UNITSeries 3 9.26 8 .77 Series 5 9.49 8 .97 Series 6 5.64 5 .33 Series 7 5.67 5 .34
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEInterest for attribution purposes 1,245,720 6,541,976 Dividends 12,734,034 5,801,374 Changes in fair value:
Net realized gain (loss) on investments 10,046,534 9,722,068 Net unrealized gain (loss) on investments 41,192,206 43,942,923
65,218,494 66,008,341
EXPENSESManagement fees and guarantee charge 10,908,068 10,295,509 Operating expenses 2,696,597 2,566,594
13,604,665 12,862,103 Withholding taxes 138,413 —
13,743,078 12,862,103
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 51,475,416 53,146,238
DATA PER SERIESSERIES 3Increase (Decrease) in Net Assets
from Operations 543,183 562,847 - per unit 0.49 0 .49
Average number of units 1,115,453 1,153,233
SERIES 5Increase (Decrease) in Net Assets
from Operations 50,471,359 52,542,900 - per unit 0.53 0 .52
Average number of units 94,733,645 101,441,795
SERIES 6*Increase (Decrease) in Net Assets
from Operations 434,634 40,463 - per unit 0.21 0 .13
Average number of units 2,060,017 300,508
SERIES 7*Increase (Decrease) in Net Assets
from Operations 26,240 28 - per unit 0.26 0 .14
Average number of units 99,637 200
* Beginning of operations in February 2014.
67DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 881,597,021 849,203,162 Increase (Decrease) in Net Assets
from operations attributable to contract owners 51,475,416 53,146,238
PremiumsSeries 3 1,221,685 1,070,070 Series 5 42,001,095 24,500,076 Series 6* 9,726,124 3,124,429 Series 7* 225,509 1,001
53,174,413 28,695,576
WithdrawalsSeries 3 (1,075,222) (1,026,296)Series 5 (70,570,138) (56,662,068)Series 6* (2,552,324) (19,914)Series 7* (5,882) —
(74,203,566) (57,708,278)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 912,043,284 873,336,698
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 51,475,416 53,146,238
Adjustments for:Net realized gain (loss) (10,046,534) (9,722,068)Net unrealized gain (loss) (41,192,206) (43,942,923)
Proceeds from sale/ maturity of investments 29,459,592 33,760,891
Investments purchased (9,006,580) (4,445,834)Receivable for securities sold 104,790 (166,525)Accrued expenses 99,244 82,020 Payable for securities purchased 41,241 (19,692)
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES 20,934,963 28,692,107
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 52,208,470 28,673,682 Amounts paid on withdrawals (73,073,980) (57,287,842)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES (20,865,510) (28,614,160)
Increase (decrease) in cash/bank overdraft 69,453 77,947
Cash (bank overdraft), beginning of period 104,454 196,583
CASH (BANK OVERDRAFT), END OF PERIOD 173,907 274,530
The accompanying notes are an integral part of these financial statements.
68 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.3%)Fidelity Canadian Balanced Fund, Series O 36,449,780 676,547,196 915,155,684
TOTAL INVESTMENTS 676,547,196 915,155,684
OTHER NET ASSETS (-0.3%) (3,112,400)
NET ASSETS (100%) 912,043,284
The accompanying notes are an integral part of these financial statements.
TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
Valeant Pharmaceuticals International 5 .0%Toronto-Dominion Bank 2 .8%Magna International 2 .7%Restaurant Brands International 2 .6%Canadian Pacific Railway 2 .5%Brookfield Asset Management 2 .3%Gildan Activewear 2 .3%Alimentation Couche-Tard 1 .7%CVS Health Corporation 1 .6%Methanex Corporation 1 .6%Spirit Airlines Inc . 1 .5%Loblaw Companies 1 .2%Moody’s Corporation 1 .2%Citigroup 1 .1%Cardinal Health 1 .1%Vermilion Energy 1 .1%Government of Canada, 3 .50%, December 1, 2045 1 .1%Medtronic 1 .0%Allergan 1 .0%West Fraser Timber Company 1 .0%Snap-On 0 .9%Team Health Holdings 0 .9%Intertape Polymer Group 0 .9%Brookfield Property Partners 0 .8%Province of Ontario, 4 .20%, June 2, 2020 0 .8%
DFS GIF – CANADIAN BALANCED – FIDELITY (cont.)
Balanced and Asset Allocation
69DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo achieve high total investment return using a diversified portfolio targeting long-term capital appreciation and a regular income stream through investment in any kind of equity or fixed-income security or money market instrument . The fundamental Investment Objective is to provide investors with a balanced asset mix with the potential for capital growth .
Investment StrategyTarget fixed asset allocation to deliver superior long-term growth potential and reduced levels of risk . The Fund invests primarily in a mix of Canadian equity securities, investment grade bonds, high yield securities and money market instruments . The equity investment decisions are based on a thorough examination of the company, financial conditions and long-term earnings potential .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 915,155,684 — — 915,155,684 TOTAL 915,155,684 — — 915,155,684
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 884,369,956 — — 884,369,956 TOTAL 884,369,956 — — 884,369,956
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
70 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmarks, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmarks % $ $FTSE TMX Canada Universe (40%) 1 .00 3,111,523 2,729,893Merrill Lynch High Yield Master II (10%) 2 .00 1,555,762 1,364,947S&P/TSX Capped (50%) 3 .00 11,668,212 10,237,100
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
DFS GIF – CANADIAN BALANCED – FIDELITY (cont.)
Balanced and Asset Allocation
71DFS GUARANTEED INVESTMENT FUNDS
The accompanying notes are an integral part of these financial statements.
DFS GIF – CANADIAN BALANCED – FIERA
Balanced and Asset Allocation
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash — 77,260 Investments at fair value through profit
or loss (FVTPL) 163,450,225 156,212,365 Investments at fair value through profit
or loss (FVTPL) pledged as collateral 30,450,779 37,183,179 Premiums receivable 422,012 129,363 Receivable for securities sold 2,457,170 547,234 Cash guarantee received for
repurchase transactions 21,206,459 13,930,968 Interest, dividends and other receivables 321,233 328,300
218,307,878 208,408,669
LIABILITIESCurrent LiabilitiesBank overdraft 5,074 —Accrued expenses 433,998 425,664 Withdrawals payable 282,034 118,102 Payable for securities purchased 2,460,128 553,776 Commitments related to repurchase
transactions 21,206,459 13,930,968 24,387,693 15,028,510
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 193,920,185 193,380,159
NET ASSETS PER UNITSeries 1 9.88 9 .53 Series 3 10.83 10 .41 Series 5 11.32 10 .85 Series 6 5.58 5 .35 Series 7 5.62 5 .37
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEInterest for attribution purposes 733,640 780,587 Dividends 1,575,531 1,456,932 Revenue from securities lending
and repurchase transactions 13,300 12,420 Foreign exchange gain (loss) on cash 9,204 2 Changes in fair value:
Net realized gain (loss) on investments 6,769,196 5,469,743 Net unrealized gain (loss) on investments 2,083,841 8,811,225
11,184,712 16,530,909
EXPENSESManagement fees and guarantee charge 2,037,829 1,964,218 Operating expenses 603,091 590,784
2,640,920 2,555,002 Withholding taxes 79,288 59,436 Commissions and other portfolio
transaction costs 85,773 113,456 2,805,981 2,727,894
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 8,378,731 13,803,015
DATA PER SERIESSERIES 1Increase (Decrease) in Net Assets
from Operations 353,137 652,652 - per unit 0.38 0 .60
Average number of units 929,553 1,082,012
SERIES 3Increase (Decrease) in Net Assets
from Operations 790,663 1,433,105 - per unit 0.44 0 .68
Average number of units 1,805,087 2,093,620
SERIES 5Increase (Decrease) in Net Assets
from Operations 7,159,665 11,711,005 - per unit 0.49 0 .74
Average number of units 14,583,458 15,767,137
SERIES 6*Increase (Decrease) in Net Assets
from Operations 60,751 6,209 - per unit 0.10 0 .30
Average number of units 599,635 20,664
SERIES 7*Increase (Decrease) in Net Assets
from Operations 14,515 44 - per unit 0.17 0 .22
Average number of units 87,634 200
* Beginning of operations in February 2014.
72 DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 193,380,159 190,758,925 Increase (Decrease) in Net Assets
from operations attributable to contract owners 8,378,731 13,803,015
PremiumsSeries 1 60,676 169,689 Series 3 739,176 449,199 Series 5 5,253,455 3,445,029 Series 6* 2,813,447 269,359 Series 7* 205,405 1,001
9,072,159 4,334,277
WithdrawalsSeries 1 (939,738) (795,041)Series 3 (1,795,698) (2,579,822)Series 5 (13,998,020) (11,724,128)Series 6* (172,211) (392)Series 7* (5,197) —
(16,910,864) (15,099,383)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 193,920,185 193,796,834
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 8,378,731 13,803,015
Adjustments for:Foreign exchange gain (loss)
on cash (9,204) (2)Net realized gain (loss) (6,769,196) (5,469,743)Net unrealized gain (loss) (2,083,841) (8,811,225)
Proceeds from sale/ maturity of investments 182,934,406 171,109,634
Investments purchased (174,581,731) (161,153,341)Receivable for securities sold (1,909,936) 642,645 Cash guarantee received
for repurchase transactions (7,275,491) 2,689,777 Interest, dividends and
other receivables 7,067 (40,152)Accrued expenses 8,334 8,366 Commitments related to
repurchase transactions 7,275,491 (2,689,777)Payable for securities purchased 1,906,352 685,549
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES 7,880,982 10,774,746
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 8,779,510 4,583,164 Amounts paid on withdrawals (16,746,932) (15,342,156)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES (7,967,422) (10,758,992)
Effect of exchange rate changes on foreign cash 4,106 (836)
Increase (decrease) in cash/bank overdraft (82,334) 14,918
Cash (bank overdraft), beginning of period 77,260 (11,220)
CASH (BANK OVERDRAFT), END OF PERIOD (5,074) 3,698
SUPPLEMENTAL INFORMATION ON CASH FLOWS FROM/USED IN OPERATING ACTIVITIES
Interest received 752,860 793,654 Dividends received, net of withholding taxes 909,703 826,314 Interest paid 4 —
The accompanying notes are an integral part of these financial statements.
DFS GIF – CANADIAN BALANCED – FIERA (cont.)
Balanced and Asset Allocation
73DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015
Number Fair of Shares Cost Value $ $
EQUITIES (41.8%)
Energy (7.6%)Canadian Natural Resources 75,127 2,590,394 2,547,557 Cenovus Energy 84,435 1,846,255 1,686,167 Enbridge 41,567 2,343,682 2,427,928 Freehold Royalties 79,400 1,429,200 1,281,516 Peyto Exploration & Development Corporation 31,683 980,637 967,282 PrairieSky Royalty 28,401 845,363 894,916 Suncor Energy 69,431 2,491,172 2,388,426 Tourmaline Oil Corp . 27,389 1,142,193 1,027,635TransCanada Corporation 31,800 1,833,146 1,614,168
15,502,042 14,835,595
Materials (5.5%)Agnico Eagle Mines 38,611 1,326,026 1,369,146 Agrium 6,600 841,822 873,642 CCL Industries, Class B 10,661 874,532 1,633,265 First Quantum Minerals 89,110 1,394,587 1,455,166 Franco-Nevada Corporation 18,760 1,029,697 1,117,533 Potash Corporation of Saskatchewan* 14,816 578,107 573,083 Tahoe Resources 159,533 2,680,154 2,415,330 West Fraser Timber Co . 16,644 837,973 1,142,278
9,562,898 10,579,443
Industrials (3.4%)ATS Automation Tooling Systems 134,158 1,696,588 2,051,276 Canadian National Railway Company 39,534 2,171,500 2,848,820 Canadian Pacific Railway* 8,523 1,308,534 1,704,770
5,176,622 6,604,866
Consumer Discretionary (2.4%)Dollarama 26,030 1,120,037 1,970,471 Gildan Activewear* 62,952 1,588,925 2,611,878
2,708,962 4,582,349
Consumer Staples (3.1%)Alimentation Couche-Tard, Class B 33,379 980,384 1,783,440 Loblaw Companies 66,127 3,332,773 4,171,291
4,313,157 5,954,731
Health Care (2.1%)Valeant Pharmaceuticals International 14,568 3,606,118 4,036,356
Financials (16.0%)CI Financial 71,762 2,256,865 2,411,203 Element Financial Corporation 66,691 876,631 1,317,147 Element Financial Corporation, Subscription Receipts 124,875 2,122,875 2,446,301 Intact Financial Corporation 15,830 1,194,236 1,373,886 Manulife Financial Corporation 177,564 3,658,564 4,121,260 Power Financial Corporation* 38,703 1,252,017 1,388,277 RioCan Real Estate Investment Trust* 36,500 1,089,671 977,105
* Securities pledged as collateral, in part or in whole, through the securities lending program.
74 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015
Number Fair of Shares Cost Value $ $
CANADIAN EQUITIES (cont.)
Financials (16.0%) (cont.)Royal Bank of Canada 86,241 5,534,508 6,587,088 Scotiabank 77,299 4,626,034 4,983,467 Toronto-Dominion Bank 103,662 4,413,614 5,498,232
27,025,015 31,103,966
Information Technology (1.1%)CGI Group, Class A* 45,789 1,477,404 2,236,793
Telecommunication Services (0.6%)TELUS Corporation 26,414 1,098,543 1,136,594
TOTAL EQUITIES 70,470,761 81,070,693
Number of Units
INVESTMENT FUND (25.0%)Fiera Global Equity Fund 3,119,805 33,037,148 48,386,484
Par Value
BONDS (20.3%)
Government of Canada (5.5%)Broadcast Center Trust 7 .530%, 2027-05-01 CAD 216,110 234,213 287,871 Government of Canada 1 .500%, 2017-02-01* CAD 1,193,000 1,210,663 1,212,155 1 .250%, 2017-08-01 CAD 3,945,000 3,998,655 4,007,364 2 .250%, 2025-06-01* CAD 839,000 876,595 882,176 5 .750%, 2033-06-01* CAD 31,000 49,770 47,441 3 .500%, 2045-12-01* CAD 2,527,000 3,143,049 3,182,881 PSP Capital Series 7, 3 .290%, 2024-04-04 CAD 120,000 119,939 129,184 Royal Office Finance
Series A, 5 .209%, 2032-11-12 CAD 725,752 719,590 901,976
10,352,474 10,651,048
Provincial Governments and Crown Corporations (6.9%)Ontario Infrastructure 4 .700%, 2037-06-01 CAD 70,000 70,093 82,801Ontario School Boards Financing Corporation Series 00A1, 7 .200%, 2025-06-09 CAD 352,750 427,921 448,400 Series 04A1, 5 .483%, 2029-11-26 CAD 403,271 430,376 483,149 Private Placement, Series 06A1, 5 .070%, 2031-04-18 CAD 385,976 385,976 443,106 Province of Alberta 3 .900%, 2033-12-01 CAD 325,000 323,567 366,358 3 .450%, 2043-12-01 CAD 361,000 335,289 381,614 Province of British Columbia 3 .200%, 2044-06-18* CAD 236,000 218,064 240,382
* Securities pledged as collateral, in part or in whole, through the securities lending program.
DFS GIF – CANADIAN BALANCED – FIERA (cont.)
Balanced and Asset Allocation
75DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015
Par Fair Value Cost Value $ $
BONDS (cont.)
Provincial Governments and Crown Corporations (6.9%) (cont.)Province of Ontario 4 .400%, 2019-06-02 CAD 451,000 508,882 506,730 4 .000%, 2021-06-02 CAD 24,000 26,238 27,144 3 .150%, 2022-06-02* CAD 1,606,000 1,635,362 1,732,834 2 .850%, 2023-06-02 CAD 2,787,000 2,744,091 2,924,876 3 .500%, 2024-06-02* CAD 982,000 1,040,912 1,073,367 2 .600%, 2025-06-02 CAD 799,000 829,028 808,841 3 .500%, 2043-06-02 CAD 141,000 131,378 148,753 3 .450%, 2045-06-02* CAD 588,000 551,255 617,528 Province of Quebec 4 .500%, 2019-12-01* CAD 1,110,000 1,228,858 1,263,161 3 .500%, 2022-12-01 CAD 612,000 638,452 674,164 2 .750%, 2025-09-01* CAD 314,000 329,800 321,096 4 .250%, 2043-12-01 CAD 233,000 238,436 276,156 3 .500%, 2045-12-01 CAD 437,000 421,028 459,405 TCHC Issuer Trust 4 .877%, 2037-05-11 CAD 59,000 59,000 70,097 Series B, 5 .395%, 2040-02-22 CAD 110,000 112,200 143,123
12,686,206 13,493,085
Corporations (7.9%)Bank of Montreal 3 .490%, 2016-06-10 CAD 46,000 48,351 47,033 2 .960%, 2016-08-02 CAD 450,000 459,240 458,891 2 .390%, 2017-07-12 CAD 531,000 532,638 543,421 3 .979%, (floating rate from 2016-07-08), 2021-07-08 CAD 437,000 458,038 448,120 3 .120%, (floating rate from 2019-09-19), 2024-09-19* CAD 259,000 261,085 267,983 Blackbird Infrastructure 407 General Partners 1 .713%, (floating rate from 2020-01-08), 2021-10-08 CAD 77,000 76,400 77,014 British Columbia Ferry Services 5 .021%, 2037-03-20 CAD 70,000 70,000 82,408 Caisse centrale Desjardins 3 .502%, 2017-10-05* CAD 100,000 105,390 104,877 2 .443%, 2019-07-17 CAD 310,000 322,214 320,911 Canadian Imperial Bank of Commerce 1 .750%, 2016-06-01 CAD 473,000 472,636 476,071 2 .350%, 2017-10-18 CAD 872,000 878,474 893,455 3 .150%, (floating rate from 2015-11-02), 2020-11-02 CAD 748,000 756,981 752,333 3 .000%, (floating rate from 2019-10-28), 2024-10-28 CAD 210,000 213,738 216,427 Canadian Utilities 4 .543%, 2041-10-24 CAD 83,000 87,263 91,983 Capital City Link Series A, 4 .386%, 2046-03-31 CAD 182,000 181,662 191,546 Capital Desjardins Series G, 5 .187%, 2020-05-05 CAD 160,000 184,640 182,562 Series F, 5 .541%, (floating rate from 2016-06-01), 2021-06-01 CAD 130,000 136,019 134,814 Cominar Real Estate Investment Trust Series 9, 4 .164%, 2022-06-01 CAD 245,000 245,000 246,898 CSS (FSCC) Partnership 6 .915%, 2042-07-31 CAD 18,670 23,963 24,927
* Securities pledged as collateral, in part or in whole, through the securities lending program.
76 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015
Par Fair Value Cost Value $ $
BONDS (cont.)Enbridge 3 .940%, 2023-06-30 CAD 120,000 120,000 125,024 7 .200%, 2032-06-18 CAD 229,000 284,550 292,502 Greater Toronto Airports Authority Series 99-1, 6 .450%, 2029-07-30 CAD 127,906 140,288 161,998 Health Montréal Collective, Private Placement Series 144A, 6 .721%, 2049-09-30 CAD 512,000 623,060 673,443 Hospital Infrastructure Series A, 5 .439%, 2045-01-31 CAD 155,000 154,998 184,493 Integrated Team Solutions SJHC 5 .946%, 2042-11-30 CAD 55,000 55,388 68,053 North West Redwater Partnership Series A, 3 .200%, 2024-07-22 CAD 195,000 195,135 201,763 Northland Power Series A, 4 .958%, 2032-12-31 CAD 155,088 155,098 176,448 Plenary Health Care Partnerships Humber 4 .895%, 2039-05-31 CAD 130,000 130,000 144,828 Plenary Properties 6 .288%, 2044-01-31 CAD 315,812 376,044 413,286 Reliance Series 1, 4 .574%, 2017-03-15 CAD 69,000 69,000 71,285 Series 2, 5 .187%, 2019-03-15 CAD 149,000 149,000 160,028 Royal Bank of Canada 2 .364%, 2017-09-21* CAD 710,000 702,201 726,530 2 .260%, 2018-03-12* CAD 202,000 205,828 206,756 2 .860%, 2021-03-04 CAD 211,000 210,973 220,538 3 .040%, (floating rate from 2019-07-17), 2024-07-17 CAD 106,000 105,981 109,655 2 .990%, (floating rate from 2019-12-06), 2024-12-06 CAD 629,000 631,019 656,260 2 .480%, (floating rate from 2020-06-04), 2025-06-04 CAD 335,000 334,936 334,380 Scotiabank 2 .370%, 2018-01-11 CAD 321,000 319,058 329,279 2 .242%, 2018-03-22 CAD 678,000 678,000 693,733 3 .270%, 2021-01-11 CAD 325,000 351,302 346,476 2 .898%, (floating rate from 2017-08-03), 2022-08-03 CAD 512,000 517,363 526,302 SNC-Lavalin Innisfree McGill Finance 6 .632%, 2044-06-30 CAD 136,193 158,242 177,954 Teranet Income Fund 5 .754%, 2040-12-17 CAD 90,000 90,000 99,904 6 .100%, 2041-06-17 CAD 477,000 530,626 544,151 Toronto-Dominion Bank 3 .226%, 2024-07-24* CAD 309,000 310,620 322,450 2 .692%, (floating rate from 2020-06-24), 2025-06-24 CAD 196,000 196,000 197,418 4 .779%, (floating rate from 2016-12-14), 2105-12-14 CAD 200,000 210,660 209,154 5 .763%, (floating rate from 2017-12-18), 2106-12-18 CAD 1,085,000 1,209,077 1,193,364 TransCanada PipeLines
8 .050%, 2039-02-17 CAD 104,000 168,454 160,681
14,896,633 15,289,810
TOTAL BONDS 37,935,313 39,433,943
* Securities pledged as collateral, in part or in whole, through the securities lending program.
DFS GIF – CANADIAN BALANCED – FIERA (cont.)
Balanced and Asset Allocation
77DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015
Par Fair Value Cost Value $ $
MONEY MARKET SECURITIES (12.6%)
Canada Treasury Bills 2015-07-30 CAD 2,445,000 2,442,042 2,442,042 2015-08-13* CAD 9,465,000 9,454,129 9,454,129 2015-08-27 CAD 870,000 868,851 868,851 2015-09-10* CAD 3,130,000 3,125,934 3,125,934 Province of Alberta, notes 2015-07-10 CAD 2,500,000 2,498,150 2,498,150 Province of British Columbia, notes 2015-07-27 CAD 1,500,000 1,498,185 1,498,185 Province of Nova Scotia, notes 2015-08-17 CAD 4,525,000 4,519,344 4,519,344
TOTAL MONEY MARKET SECURITIES 24,406,635 24,406,635
MORTGAGE-BACKED SECURITIES (0.2%)
Merrill Lynch Financial Assets 4 .826%, 2016-02-12 CAD 100,000 87,221 101,316 4 .642%, 2016-10-12 CAD 400,000 176,762 197,277 Series 2007-CA22, Class A3, 4 .878%, 2017-04-12 CAD 50,000 45,800 52,666 Merrill Lynch Mortgage Loans 4 .711%, 2016-11-12 CAD 200,000 32,927 36,737 Real Estate Asset Liquidity Trust 4 .449%, 2016-08-12 CAD 100,000 16,796 18,634
TOTAL MORTGAGE-BACKED SECURITIES 359,506 406,630
ASSET-BACKED SECURITIES (0.1%)
CHIP Mortgage Trust 3 .663%, 2038-09-25 CAD 186,000 186,000 196,619
PORTFOLIO TRANSACTION COSTS INCLUDED IN THE SECURITIES’ COST (38,160) —
TOTAL INVESTMENTS (100.0%) 166,357,203 193,901,004
OTHER NET ASSETS (-0.0%) 19,181
NET ASSETS (100%) 193,920,185
* Securities pledged as collateral, in part or in whole, through the securities lending program.The accompanying notes are an integral part of these financial statements.
TOP FIVE HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
FIERA GLOBAL EQUITY FUND 25.0%Moody’s Corporation 4 .5%Becton, Dickinson and Company 3 .7%Johnson & Johnson 3 .4%Wells Fargo & Company 3 .2%US Bancorp 3 .2%
78 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo provide investors with a balance of capital growth and interest income by investing primarily in Canadian fixed-income and equity securities .
Investment StrategyTo provide such a balance by investing a portion of its assets in the common shares of medium and large cap Canadian corporations and the remainder in Canadian government and Canadian investment-grade corporate bonds and other interest-bearing instruments .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLEquities 81,070,693 — — 81,070,693 Bonds 22,769,479 16,664,464 — 39,433,943 Investment Funds — 48,386,484 — 48,386,484 Mortgage-Backed Securities — 406,630 — 406,630 Asset-Backed Securities — 196,619 — 196,619 Money Market Securities 24,406,635 — — 24,406,635 TOTAL 128,246,807 65,654,197 — 193,901,004
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLEquities 80,447,407 — — 80,447,407 Bonds 22,904,527 15,597,683 — 38,502,210 Investment Funds — 47,679,417 — 47,679,417 Mortgage-Backed Securities — 434,583 — 434,583 Asset-Backed Securities — 193,141 — 193,141 Money Market Securities 26,138,786 — — 26,138,786 TOTAL 129,490,720 63,904,824 — 193,395,544
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Classification of Level 3As at June 30, 2015, the Fund has no financial instruments classified within Level 3 .
As at December 31, 2014, the Fund has financial instruments requiring Level 3 valuation . Fair value measurements are derived from valuation techniques . The substitution of one or more data from these techniques by one or several reasonably possible assumptions should not result in significant changes in the fair value of these investments . The following table explains the classification of fair value within Level 3:
December 31, 2014 Financial instruments Fair value $ Valuation techniques Unobservable inputs Range
Protective Products of America — Discounting of cash flows Recovery rate —
DFS GIF – CANADIAN BALANCED – FIERA (cont.)
Balanced and Asset Allocation
79DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Reconciliation of Level 3 Fair Value MeasurementThe following table summarizes a reconciliation of movements on Level 3 financial instruments between the beginning and end of the period:
December 31, 2014 Equities$
Balance, Beginning of Year — Proceeds from sale of investments 768,768 Investments purchased — Net realized gain (loss) — Net unrealized gain (loss) (768,768)Transfers to (from) Level 3 —
Balance, End of Year —
Change in Net Unrealized Gain (Loss) of the Year for Securities Held as at December 31, 2014 —
Certain securities classified Level 3 entailed restrictions . In April 2014, these securities valued at approximately $769,000 were transfered from Level 3 to Level 1 following the expiration of the restrictions .
Investments in Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Currency RiskAs at June 30, 2015 and December 31, 2014, part of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .As at June 30, 2015 and December 31, 2014, the majority of the Fund’s financial assets and liabilities are denominated in Canadian dollars . As a result, the Fund is not significantly exposed to currency risk .
Interest Rate RiskPart of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The following table summarizes the Fund’s exposure to interest rate risk . It includes the Fund’s financial assets and liabilities at fair value, categorized by the earlier of contractual re-pricing or maturity dates . The table also illustrates the impact on the Net Assets Attributable to Contract Owners, had prevailing interest rates changed by 0 .25%, assuming a parallel shift in the yield curve, with all other variables held constant .
80 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Less than 1 Year 1 to 5 Years 5 to 10 Years
Greater than 10 Years Total
Impact on Net Assets Attributable to Contract
Owners$ $ $ $ $ $
June 30, 2015 25,913,128 16,222,529 10,164,135 12,138,961 64,438,753 721,053
December 31, 2014 27,398,680 16,778,275 9,545,391 11,623,634 65,345,980 668,950
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Concentration RiskPart of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The following table summarizes the concentration risk, as in percentages of the Net Assets Attributable to Contract Owners:
June 30, 2015 December 31, 2014MARKET SEGMENT % MARKET SEGMENT %Equities Equities
Financials 16 .0 Financials 14 .4Energy 7 .6 Energy 8 .1Materials 5 .5 Materials 4 .3Industrials 3 .4 Industrials 4 .1Consumer Staples 3 .1 Consumer Discretionary 3 .6Consumer Discretionary 2 .4 Consumer Staples 3 .0Health Care 2 .1 Information Technology 2 .0Information Technology 1 .1 Telecommunication Services 1 .5Telecommunication Services 0 .6 Health Care 0 .6
Investment Funds 25 .0 Investment Funds 24 .7Bonds Bonds
Corporations 7 .9 Corporations 7 .3Provincial Governments and Crown Corporations 6 .9 Provincial Governments and Crown Corporations 6 .8Government of Canada 5 .5 Government of Canada 5 .8
Money Market Securities 12 .6 Money Market Securities 13 .5Mortgage-Backed Securities 0 .2 Mortgage-Backed Securities 0 .2Asset-Backed Securities 0 .1 Asset-Backed Securities 0 .1TOTAL 100 TOTAL 100
DFS GIF – CANADIAN BALANCED – FIERA (cont.)
Balanced and Asset Allocation
81DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Price RiskThe Fund may trade in financial instruments and take positions in traded and over-the-counter instruments .Part of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmarks, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in Price Impact on Net Assets Attributable to Contract Owners
June 30, 2015 December 31, 2014Benchmarks % $ $FTSE TMX Canada 91 Day Treasury Bills (10%) 0 .25 48,702 50,705FTSE TMX Canada Universe (30%) 1 .00 584,422 608,463S&P/TSX Capped (40%) 3 .00 2,337,688 2,433,852MSCI World Net (20%) 3 .00 1,168,844 1,216,926
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskPart of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Fund’s credit risk concentration is separated between fixed-income and money market securities . Their fair values include consideration of the issuers’ creditworthiness and accordingly, represent the Fund’s maximum exposure to credit risk .The investment grade for Canadian fixed-income securities and money market securities is rated by the Dominion Bond Rating Service (“DBRS”), Standard & Poor’s or Moody’s . The investment grade for foreign fixed-income securities and money market securities is rated by Standard & Poor’s, Moody’s or Fitch . In cases where the credit rating agencies do not agree on a credit rating for fixed-income securities and money market securities, they will be classified following these rules:• If two credit ratings are available, but the ratings are different, the lowest rating is used;• If three credit ratings are available, the most common credit rating is used;• If all three credit rating agencies have different ratings, the middle credit rating is used .The credit rating is then converted to DBRS format . Generally, the greater the credit rating of a security, the lower the probability of it defaulting on its obligations .
Portfolio’s fixed-income securities by credit rating category
Credit rating Percentage of Fixed-Income SecuritiesJune 30, 2015 December 31, 2014
% %AAA 31 33 AA 38 37A 24 24BBB 7 6TOTAL 100 100
82 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Portfolio’s money market securities by credit rating category
Credit rating Percentage of Money Market SecuritiesJune 30, 2015 December 31, 2014
% %R-1 (High) 81 100 R-1 (Middle) 19 — TOTAL 100 100
Securities Lending and Repurchase TransactionsAs part of its securities lending and repurchase transactions, the Fund is exposed to counterparty credit risk . The carrying amount of financial assets pledged as collateral for liabilities is:
$June 30, 2015 21,180,624 December 31, 2014 13,331,416
The fair value of the financial assets held as collateral that the fund is permitted to sell or repledge in the absence of default totalled:
$June 30, 2015 13,894,928 December 31, 2014 8,737,913
The fair value of financial assets accepted as collateral which have been sold or repledged totalled:
$June 30, 2015 98 December 31, 2014 465,093
These financial assets were received as collateral as part of transactions involving reverse repurchase transactions .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, part of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
DFS GIF – CANADIAN BALANCED – FIERA (cont.)
Balanced and Asset Allocation
83DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
DERECOGNITION OF FINANCIAL ASSETS
Securities lending and repurchase transactionsAs part of transactions involving securities lending or repurchase transactions, the Fund transfers financial assets under terms and conditions providing for their future repurchase . These financial assets remain recognized in the “Investments at fair value through profit or loss pledged as collateral” of the Statement of Financial Position as the Fund retains substantially all the risks and rewards related to these assets .
June 30, 2015 December 31, 2014$ $
Investments at FVTPL pledged as Collateral 30,450,779 37,183,179 Value of Collateral Securities 31,061,055 37,926,959
The Funds require collateral in the form of cash or such other securities as may be acceptable to Desjardins Financial Security and that have an aggregate value of no less than 102% of the loaned securities fair value .
The following table presents the carrying amount and the fair value of financial assets transferred by the Fund but not derecognized as well as the related liabilities recognized in “Commitments related to repurchase transactions” and “Commitments related to securities lending” of the Statement of Financial Position .
Fair Value*June 30, 2015 December 31, 2014
$ $Financial Assets 21,180,624 13,331,416 Related Liabilities 21,201,919 13,466,296
* The fair value equals carrying amount .
84 DFS GUARANTEED INVESTMENT FUNDS
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash — 90,541 Investments at fair value through profit
or loss (FVTPL) 217,162,083 226,992,577 Premiums receivable 273,701 398,453 Receivable for securities sold 81,914 36,484
217,517,698 227,518,055
LIABILITIESCurrent LiabilitiesBank overdraft 80,357 —Accrued expenses 502,090 516,062 Withdrawals payable 408,171 436,491 Payable for securities purchased 70,319 226,820
1,060,937 1,179,373
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 216,456,761 226,338,682
NET ASSETS PER UNITSeries 3 7.01 6 .96 Series 5 7.23 7 .16 Series 6 5.16 5 .10 Series 7 5.19 5 .12
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEInterest for attribution purposes 2,262 (1,468)Dividends 75,390 —Changes in fair value:
Net realized gain (loss) on investments 4,061,046 958,686 Net unrealized gain (loss) on investments 1,435,734 14,208,153
5,574,432 15,165,371
EXPENSESManagement fees and guarantee charge 2,364,415 2,201,306 Operating expenses 741,687 742,868
3,106,102 2,944,174 Withholding taxes 2,262 —
3,108,364 2,944,174
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 2,466,068 12,221,197
DATA PER SERIESSERIES 3Increase (Decrease) in Net Assets
from Operations 86,297 524,002 - per unit 0.08 0 .39
Average number of units 1,136,751 1,342,139
SERIES 5Increase (Decrease) in Net Assets
from Operations 2,238,279 11,655,787 - per unit 0.08 0 .41
Average number of units 26,590,421 28,382,617
SERIES 6*Increase (Decrease) in Net Assets
from Operations 129,183 41,696 - per unit 0.03 0 .14
Average number of units 3,796,194 288,326
SERIES 7*Increase (Decrease) in Net Assets
from Operations 12,309 (288)- per unit 0.03 (0 .04)
Average number of units 375,299 7,865
* Beginning of operations in February 2014.
DFS GIF – CANADIAN BALANCED – BISSETT
Balanced and Asset Allocation
85DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 226,338,682 197,586,751 Increase (Decrease) in Net Assets
from operations attributable to contract owners 2,466,068 12,221,197
PremiumsSeries 3 277,151 1,321,680 Series 5 5,969,689 19,555,409 Series 6* 6,768,704 3,460,723 Series 7* 966,558 251,001
13,982,102 24,588,813
WithdrawalsSeries 3 (1,174,074) (1,879,804)Series 5 (23,008,168) (11,652,420)Series 6* (2,064,530) (6,322)Series 7* (83,319) (750)
(26,330,091) (13,539,296)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 216,456,761 220,857,465
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 2,466,068 12,221,197
Adjustments for:Net realized gain (loss) (4,061,046) (958,686)Net unrealized gain (loss) (1,435,734) (14,208,153)
Proceeds from sale/ maturity of investments 18,673,617 5,334,837
Investments purchased (3,346,343) (13,496,251)Receivable for securities sold (45,430) 51,010 Accrued expenses (13,972) 61,015 Payable for securities purchased (156,501) 57,082
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES 12,080,659 (10,937,949)
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 14,106,854 24,526,697 Amounts paid on withdrawals (26,358,411) (13,497,343)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES (12,251,557) 11,029,354
Increase (decrease) in cash/bank overdraft (170,898) 91,405
Cash (bank overdraft), beginning of period 90,541 (100,969)
CASH (BANK OVERDRAFT), END OF PERIOD (80,357) (9,564)
SUPPLEMENTAL INFORMATION ON CASH FLOWS FROM/USED IN OPERATING ACTIVITIESInterest paid — 1,468
The accompanying notes are an integral part of these financial statements.
86 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.3%)Franklin Bissett Canadian Balanced Fund, Series O 4,917,620 167,222,352 217,162,083
TOTAL INVESTMENTS 167,222,352 217,162,083
OTHER NET ASSETS (-0.3%) (705,322)
NET ASSETS (100%) 216,456,761
The accompanying notes are an integral part of these financial statements.
TOP HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
Franklin Bissett Canadian Equity Fund 18 .1%Franklin Bissett Core Plus Bond Fund 12 .7%Franklin Bissett Corporate Bond Fund 11 .5%Franklin Bissett Microcap Fund 5 .5%Franklin Bissett Small Cap Fund 5 .4%Franklin Mutual Global Discovery Fund 4 .7%Templeton EAFE Developed Markets Fund 4 .7%Franklin U .S . Rising Dividends Fund 4 .5%Franklin Bissett U .S . Focus Fund 4 .5%Franklin Bissett Canadian Short Term Bond Fund 4 .0%Franklin Bissett Canadian Dividend Fund 3 .6%Franklin Bisset All Canadian Focus Fund 3 .6%Franklin Strategic Income Fund 3 .3%Templeton Global Bond Fund 3 .3%Franklin Bissett Canadian High Dividend Fund 2 .8%Franklin Bissett Monthly Income And Growth Fund 2 .5%Templeton Global Smaller Companies Fund 2 .5%Templeton Emerging Markets Fund 2 .0%Cash and Cash Equivalents 0 .8%
DFS GIF – CANADIAN BALANCED – BISSETT (cont.)
Balanced and Asset Allocation
87DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo provide investors with a balance of current income and long-term capital appreciation primarily through the investment in Canadian fixed-income and equity securities .
Investment StrategyTo provide such an opportunity by investing in a diversified portfolio of Bissett mutual funds . The underlying funds may invest in foreign securities .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 217,162,083 — — 217,162,083 TOTAL 217,162,083 — — 217,162,083
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 226,992,577 — — 226,992,577 TOTAL 226,992,577 — — 226,992,577
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
88 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmarks, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmarks % $ $FTSE TMX Canada Universe (35%) 1 .00 633,602 751,941Barclays Capital U .S . Aggregate Bond (2 .5%) 1 .00 45,257 53,710J .P . Morgan Global Government Bond (2 .5%) 1 .00 45,257 53,710S&P/TSX Small Cap (5%) 3 .00 271,544 322,260S&P/TSX (32 .5%) 3 .00 1,765,036 2,094,692S&P 500 (10%) 3 .00 543,088 644,521MSCI EAFE Net (10%) 3 .00 543,088 644,521MSCI Emerging Markets Net (2 .5%) 3 .00 135,772 161,130
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
DFS GIF – CANADIAN BALANCED – BISSETT (cont.)
Balanced and Asset Allocation
89DFS GUARANTEED INVESTMENT FUNDS
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 56,321 —Investments at fair value through profit
or loss (FVTPL) 540,185,832 517,888,640 Premiums receivable 725,129 283,275 Receivable for securities sold — 454,301
540,967,282 518,626,216
LIABILITIESCurrent LiabilitiesBank overdraft — 101,925 Accrued expenses 1,342,469 1,274,020 Withdrawals payable 1,107,338 946,605 Payable for securities purchased 205,628 —
2,655,435 2,322,550
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 538,311,847 516,303,666
NET ASSETS PER UNITSeries 3 6.35 5 .99 Series 5 6.51 6 .13 Series 6 5.52 5 .19 Series 7 5.55 5 .21
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEInterest for attribution purposes — (14)Changes in fair value:
Net realized gain (loss) on investments 7,709,001 5,090,500 Net unrealized gain (loss) on investments 32,414,746 23,139,300
40,123,747 28,229,786
EXPENSESManagement fees and guarantee charge 6,474,120 6,054,118 Operating expenses 1,609,065 1,525,945
8,083,185 7,580,063
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 32,040,562 20,649,723
DATA PER SERIESSERIES 3Increase (Decrease) in Net Assets
from Operations 791,920 551,004 - per unit 0.38 0 .23
Average number of units 2,105,235 2,442,854
SERIES 5Increase (Decrease) in Net Assets
from Operations 30,758,452 20,059,778 - per unit 0.39 0 .24
Average number of units 79,300,788 83,665,541
SERIES 6*Increase (Decrease) in Net Assets
from Operations 465,651 38,926 - per unit 0.21 0 .10
Average number of units 2,186,826 387,279
SERIES 7*Increase (Decrease) in Net Assets
from Operations 24,539 15 - per unit 0.20 0 .07
Average number of units 121,165 200
* Beginning of operations in February 2014.
DFS GIF – BALANCED GROWTH – QUOTENTIAL
Balanced and Asset Allocation
90 DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 516,303,666 499,234,701 Increase (Decrease) in Net Assets
from operations attributable to contract owners 32,040,562 20,649,723
PremiumsSeries 3 763,280 480,155 Series 5 20,279,126 12,382,507 Series 6* 7,621,356 3,677,222 Series 7* 301,322 1,001
28,965,084 16,540,885
WithdrawalsSeries 3 (1,539,604) (928,889)Series 5 (36,889,746) (21,787,992)Series 6* (563,295) (6,946)Series 7* (4,820) —
(38,997,465) (22,723,827)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 538,311,847 513,701,482
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 32,040,562 20,649,723
Adjustments for:Net realized gain (loss) (7,709,001) (5,090,500)Net unrealized gain (loss) (32,414,746) (23,139,300)
Proceeds from sale/ maturity of investments 26,375,701 19,501,942
Investments purchased (8,549,146) (5,525,344)Receivable for securities sold 454,301 (18,762)Accrued expenses 68,449 56,720 Payable for securities purchased 205,628 77,229
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES 10,471,748 6,511,708
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 28,523,230 16,534,579 Amounts paid on withdrawals (38,836,732) (22,956,560)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES (10,313,502) (6,421,981)
Increase (decrease) in cash/bank overdraft 158,246 89,727
Cash (bank overdraft), beginning of period (101,925) (13,617)
CASH (BANK OVERDRAFT), END OF PERIOD 56,321 76,110
SUPPLEMENTAL INFORMATION ON CASH FLOWS FROM/USED IN OPERATING ACTIVITIESInterest paid — 14
The accompanying notes are an integral part of these financial statements.
DFS GIF – BALANCED GROWTH – QUOTENTIAL (cont.)
Balanced and Asset Allocation
91DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.3%)Franklin Quotential Balanced Growth Portfolio 47,013,562 349,959,157 540,185,832
TOTAL INVESTMENTS 349,959,157 540,185,832
OTHER NET ASSETS (-0.3%) (1,873,985)
NET ASSETS (100%) 538,311,847
The accompanying notes are an integral part of these financial statements.
TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
Franklin Bissett Core Plus Bond Fund 19 .8%Franklin U .S . Core Equity Fund 6 .1%SPDR Euro Stoxx 50 ETF 5 .9%Templeton Asian Growth Fund 5 .8%Franklin Mutual European Fund 5 .7%Franklin Bissett Canadian Equity Fund 5 .6%Templeton Global Bond Fund 5 .4%Franklin Flex Cap Growth Fund 4 .7%Franklin U .S . Rising Dividends Fund 4 .5%Franklin Bisset All Canadian Focus Fund 4 .5%Franklin Templeton Canadian Large Cap Fund 3 .0%WisdomTree Japan Hedged Equity ETF 2 .9%Franklin Strategic Income Fund 2 .6%iShares MSCI Japan ETF 2 .4%iShares Intermediate Credit Bond ETF 2 .0%Franklin Bissett Small Cap Fund 1 .8%Franklin European Small-Mid Cap Growth Fund 1 .8%BMO Mid Federal Bond Index ETF 1 .6%Franklin World Growth Fund 1 .5%Franklin Japan Fund 1 .5%iShares MSCI Japan Small-Cap ETF 1 .2%WisdomTree Australia & New Zealand Debt ETF 0 .9%iShares MSCI China ETF 0 .8%iShares Russell 1000 Value ETF 0 .8%Templeton Frontier Markets Fund 0 .7%
92 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo provide a balance of capital growth and interest income by investing primarily in units of an individual underlying fund in order to gain the desired exposure to the equity and fixed income markets .
Investment StrategyTo emphasize investments in equity underlying funds in order to increase the potential for capital appreciation over a longer investment horizon . The Fund also invests, to a lesser extent, in fixed income underlying funds in order to provide stability .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 540,185,832 — — 540,185,832 TOTAL 540,185,832 — — 540,185,832
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 517,888,640 — — 517,888,640 TOTAL 517,888,640 — — 517,888,640
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks . Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification . Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
DFS GIF – BALANCED GROWTH – QUOTENTIAL (cont.)
Balanced and Asset Allocation
93DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmarks, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmarks % $ $FTSE TMX Canada Universe (30%) 1 .00 1,604,954 1,660,942Barclays Capital Multiverse (Hedged) (10%) 1 .00 534,985 553,647S&P/TSX (30%) 3 .00 4,814,861 4,982,827MSCI All Country World Net (30%) 3 .00 4,814,861 4,982,827
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
94 DFS GUARANTEED INVESTMENT FUNDS
DFS GIF – CANADIAN BALANCED – CI SIGNATURE
Balanced and Asset Allocation
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 8,686 —Investments at fair value through profit
or loss (FVTPL) 110,510,946 96,604,912 Premiums receivable 214,517 395,198 Receivable for securities sold 5,023 5,721
110,739,172 97,005,831
LIABILITIESCurrent LiabilitiesBank overdraft — 5,623 Accrued expenses 273,681 232,154 Withdrawals payable 332,331 85,733 Payable for securities purchased 88,396 336,784
694,408 660,294
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 110,044,764 96,345,537
NET ASSETS PER UNITSeries 5 6.81 6 .69 Series 6 5.47 5 .37 Series 7 5.51 5 .39
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEInterest for attribution purposes — (4,706)Changes in fair value:
Net realized gain (loss) on investments 256,856 400,241 Net unrealized gain (loss) on investments 2,864,259 6,629,906
3,121,115 7,025,441
EXPENSESManagement fees and guarantee charge 1,226,170 954,221 Operating expenses 344,192 298,519
1,570,362 1,252,740
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 1,550,753 5,772,701
DATA PER SERIESSERIES 5Increase (Decrease) in Net Assets
from Operations 1,509,581 5,753,668 - per unit 0.11 0 .43
Average number of units 13,348,363 13,302,435
SERIES 6*Increase (Decrease) in Net Assets
from Operations 39,508 18,986 - per unit 0.02 0 .26
Average number of units 2,383,506 71,706
SERIES 7*Increase (Decrease) in Net Assets
from Operations 1,664 47 - per unit 0.01 0 .23
Average number of units 184,979 200
* Beginning of operations in February 2014.
95DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 96,345,537 81,150,995 Increase (Decrease) in Net Assets
from operations attributable to contract owners 1,550,753 5,772,701
PremiumsSeries 5 10,830,363 3,492,480 Series 6* 8,904,148 1,076,025 Series 7* 690,527 1,001
20,425,038 4,569,506
WithdrawalsSeries 5 (7,151,627) (5,047,420)Series 6* (1,082,988) (14,967)Series 7* (41,949) —
(8,276,564) (5,062,387)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 110,044,764 86,430,815
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 1,550,753 5,772,701
Adjustments for:Net realized gain (loss) (256,856) (400,241)Net unrealized gain (loss) (2,864,259) (6,629,906)
Proceeds from sale/ maturity of investments 2,576,362 3,842,226
Investments purchased (13,361,281) (1,699,049)Receivable for securities sold 698 25,305 Accrued expenses 41,527 16,103 Payable for securities purchased (248,388) (67,577)
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES (12,561,444) 859,562
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 20,605,719 4,410,523 Amounts paid on withdrawals (8,029,966) (4,937,121)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES 12,575,753 (526,598)
Increase (decrease) in cash/bank overdraft 14,309 332,964
Cash (bank overdraft), beginning of period (5,623) (332,519)
CASH (BANK OVERDRAFT), END OF PERIOD 8,686 445
SUPPLEMENTAL INFORMATION ON CASH FLOWS FROM/USED IN OPERATING ACTIVITIESInterest paid — 4,706
The accompanying notes are an integral part of these financial statements.
96 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.4%)Signature Canadian Balanced Fund, Class I 10,855,692 100,616,481 110,510,946
TOTAL INVESTMENTS 100,616,481 110,510,946
OTHER NET ASSETS (-0.4%) (466,182)
NET ASSETS (100%) 110,044,764
The accompanying notes are an integral part of these financial statements.
TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
Scotiabank 3 .9%Toronto-Dominion Bank 3 .5%Royal Bank of Canada 3 .5%Canadian National Railway Company 1 .8%Province of Quebec, 4 .50%, December 1, 2019 1 .4%Apple 1 .3%Alimentation Couche-Tard 1 .3%Citigroup 1 .2%Province of Ontario, 4 .20%, June 2, 2020 1 .2%Province of Quebec, 2 .75%, September 1, 2025 1 .2%Government of Canada, 2 .75%, June 1, 2022 1 .1%UBS Group AG 1 .1%Government of Canada, 5 .75%, June 1, 2033 1 .0%AstraZeneca 1 .0%Novartis AG 1 .0%Power Corporation of Canada 1 .0%NXP Semiconductor 1 .0%Province of Ontario, 3 .50%, June 2, 2024 0 .9%Roche Holding AG 0 .9%Province of Ontario, 2 .10%, September 8, 2018 0 .9%Enbridge 0 .8%Province of Quebec, 4 .25%, December 1, 2021 0 .8%JPMorgan Chase & Company 0 .8%Province of Quebec, 3 .75%, September 1, 2024 0 .8%EnCana Corporation 0 .7%
DFS GIF – CANADIAN BALANCED – CI SIGNATURE (cont.)
Balanced and Asset Allocation
97DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo provide investors with an attractive balance of current income and capital appreciation by investing primarily in a combination of Canadian equity and equity-related securities and fixed income securities .
Investment StrategyFor the equity portion, the Fund invests primarily in companies providing a stable income or consistent dividends . For the income portion, the portfolio advisor selects high-quality fixed income securities, including bank loans and floating rate debt instruments but may choose to shift the weighting of the portion of the Fund held in bonds with longer terms to maturity depending on the expected fluctuations in interest rates . The Fund may also invest in foreign securities as well as warrants and derivatives, the latter to aid in hedging against potential losses resulting from changes in the prices of the securities that the Fund has invested in as well as any exposure from foreign currencies .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 110,510,946 — — 110,510,946 TOTAL 110,510,946 — — 110,510,946
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 96,604,912 — — 96,604,912 TOTAL 96,604,912 — — 96,604,912
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
98 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmarks, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmarks % $ $FTSE TMX Canada Universe (40%) 1 .00 356,818 336,005S&P/TSX (30%) 3 .00 802,840 756,012MSCI All Country World Net (30%) 3 .00 802,840 756,012
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
DFS GIF – CANADIAN BALANCED – CI SIGNATURE (cont.)
Balanced and Asset Allocation
99DFS GUARANTEED INVESTMENT FUNDS
The accompanying notes are an integral part of these financial statements.
DFS GIF – BALANCED – ETHICAL
Balanced and Asset Allocation
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsInvestments at fair value through profit
or loss (FVTPL) 8,067,907 7,635,866 Premiums receivable 10,395 1,012 Receivable for securities sold 12,997 5,869
8,091,299 7,642,747
LIABILITIESCurrent LiabilitiesBank overdraft 11,765 278 Accrued expenses 19,781 18,620 Withdrawals payable 6,525 7,452 Payable for securities purchased — 982
38,071 27,332
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 8,053,228 7,615,415
NET ASSETS PER UNITSeries 5 5.48 5 .43 Series 6 5.28 5 .22 Series 7 5.31 5 .24
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEInterest for attribution purposes — (740)Changes in fair value:
Net realized gain (loss) on investments 68,525 69,781 Net unrealized gain (loss) on investments 126,181 474,376
194,706 543,417
EXPENSESManagement fees and guarantee charge 89,950 85,612 Operating expenses 27,294 27,222
117,244 112,834
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 77,462 430,583
DATA PER SERIESSERIES 5Increase (Decrease) in Net Assets
from Operations 77,901 427,330 - per unit 0.06 0 .30
Average number of units 1,351,142 1,447,830
SERIES 6*Increase (Decrease) in Net Assets
from Operations (714) 3,211 - per unit (0.01) 0 .20
Average number of units 92,129 15,920
SERIES 7*Increase (Decrease) in Net Assets
from Operations 275 42 - per unit 0.07 0 .21
Average number of units 3,861 200
* Beginning of operations in February 2014.
100 DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 7,615,415 7,743,372 Increase (Decrease) in Net Assets
from operations attributable to contract owners 77,462 430,583
PremiumsSeries 5 327,359 373,723 Series 6* 570,603 120,923 Series 7* — 1,001
897,962 495,647
WithdrawalsSeries 5 (394,636) (964,016)Series 6* (142,975) (152)Series 7* — —
(537,611) (964,168)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 8,053,228 7,705,434
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 77,462 430,583
Adjustments for:Net realized gain (loss) (68,525) (69,781)Net unrealized gain (loss) (126,181) (474,376)
Proceeds from sale/ maturity of investments 466,799 894,324
Investments purchased (704,134) (226,734)Receivable for securities sold (7,128) 14,624 Accrued expenses 1,161 (165)Payable for securities purchased (982) (29,088)
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES (361,528) 539,387
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 888,579 495,548 Amounts paid on withdrawals (538,538) (965,796)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES 350,041 (470,248)
Increase (decrease) in cash/bank overdraft (11,487) 69,139
Cash (bank overdraft), beginning of period (278) (68,897)
CASH (BANK OVERDRAFT), END OF PERIOD (11,765) 242
SUPPLEMENTAL INFORMATION ON CASH FLOWS FROM/USED IN OPERATING ACTIVITIESInterest paid — 740
The accompanying notes are an integral part of these financial statements.
DFS GIF – BALANCED – ETHICAL (cont.)
Balanced and Asset Allocation
101DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.2%)NEI Ethical Balanced Fund, Series I 589,957 6,970,274 8,067,907
TOTAL INVESTMENTS 6,970,274 8,067,907
OTHER NET ASSETS (-0.2%) (14,679)
NET ASSETS (100%) 8,053,228
The accompanying notes are an integral part of these financial statements.
TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
Government of Canada, 1 .50%, June 1, 2023 9 .6%Element Financial Corporation 3 .6%Tesla Motors 3 .2%Skyworks Solutions 3 .1%Royal Bank of Canada, 2 .98%, May 7, 2019 2 .9%Government of Canada, 4 .00%, June 1, 2041 2 .9%Manulife Financial Corporation 2 .8%Dollarama 2 .7%Apple 2 .6%Regeneron Pharmaceuticals 2 .5%Toronto-Dominion Bank 2 .5%Royal Bank of Canada 2 .4%Boyd Group Income Fund 2 .3%Toronto-Dominion Bank, 2 .171%, April 2, 2018 2 .2%Methanex Corporation 2 .0%Visa 2 .0%McDonald’s Corporation 2 .0%Intesa Sanpaolo 1 .7%Canadian Natural Resources, 2 .89%, August 14, 2020 1 .7%Biogen Idec Inc . 1 .7%Magna International 1 .7%Suncor Energy 1 .7%JPMorgan Chase & Company 1 .6%Scotiabank, 2 .37%, January 11, 2018 1 .6%Scotiabank, 2 .242%, March 22, 2018 1 .6%
102 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo provide the investor with long term returns and a high level of current income by investing primarily in a mix of Canadian and American equities and fixed income investments .
Investment StrategyThe allocation to each of the Fund’s asset classes is actively managed . For the Fund’s Canadian equity portion, securities are selected using a growth-at-a-reasonable-price (GARP) approach, which stresses valuation criteria and fundamental analysis . Global equities are identified by both risk and return criteria . The fixed-income portion employs sector management, maturity strategies, and limited rate-anticipation strategies . The Fund follows a socially responsible approach to investing .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 8,067,907 — — 8,067,907 TOTAL 8,067,907 — — 8,067,907
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 7,635,866 — — 7,635,866 TOTAL 7,635,866 — — 7,635,866
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
DFS GIF – BALANCED – ETHICAL (cont.)
Balanced and Asset Allocation
103DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .As at June 30, 2015 and December 31, 2014, the Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmarks, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmarks % $ $FTSE TMX Canada Universe (50%) 1 .00 36,241 38,398S&P/TSX (40%) 3 .00 86,979 92,156MSCI World Net (10%) 3 .00 21,745 23,039
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
104 DFS GUARANTEED INVESTMENT FUNDS
The accompanying notes are an integral part of these financial statements.
DFS GIF – INCOME AND GROWTH – CI SIGNATURE
Balanced and Asset Allocation
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 836 7,085 Investments at fair value through profit
or loss (FVTPL) 69,283,109 58,358,379 Premiums receivable 231,294 191,455 Receivable for securities sold 4,744 —
69,519,983 58,556,919
LIABILITIESCurrent LiabilitiesAccrued expenses 173,241 142,932 Withdrawals payable 63,377 25,705 Payable for securities purchased 167,392 126,806
404,010 295,443
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 69,115,973 58,261,476
NET ASSETS PER UNITSeries 5 6.39 6 .24 Series 6 5.43 5 .30 Series 7 5.46 5 .31
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEInterest for attribution purposes 611,436 481,780 Dividends 392,204 348,875 Changes in fair value:
Net realized gain (loss) on investments 1,443,858 900,210 Net unrealized gain (loss) on investments (83,027) 2,013,077
2,364,471 3,743,942
EXPENSESManagement fees and guarantee charge 857,226 604,045 Operating expenses 133,541 102,268
990,767 706,313
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 1,373,704 3,037,629
DATA PER SERIESSERIES 5Increase (Decrease) in Net Assets
from Operations 1,267,617 3,015,759 - per unit 0.15 0 .39
Average number of units 8,462,919 7,654,752
SERIES 6*Increase (Decrease) in Net Assets
from Operations 84,202 21,826 - per unit 0.04 0 .19
Average number of units 1,882,988 113,054
SERIES 7*Increase (Decrease) in Net Assets
from Operations 21,885 44 - per unit 0.14 0 .22
Average number of units 151,280 200
* Beginning of operations in February 2014.
105DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 58,261,476 40,521,198 Increase (Decrease) in Net Assets
from operations attributable to contract owners 1,373,704 3,037,629
PremiumsSeries 5 6,617,045 6,561,784 Series 6* 8,141,097 1,286,132 Series 7* 397,527 176,001
15,155,669 8,023,917
WithdrawalsSeries 5 (5,020,712) (1,725,674)Series 6* (616,060) (5,984)Series 7* (38,104) —
(5,674,876) (1,731,658)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 69,115,973 49,851,086
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 1,373,704 3,037,629
Adjustments for:Net realized gain (loss) (1,443,858) (900,210)Net unrealized gain (loss) 83,027 (2,013,077)
Proceeds from sale/ maturity of investments 2,805,543 1,628,423
Investments purchased (12,369,442) (7,973,388)Receivable for securities sold (4,744) (35,568)Accrued expenses 30,309 26,784 Payable for securities purchased 40,586 (111,009)
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES (9,484,875) (6,340,416)
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 15,115,830 7,934,489 Amounts paid on withdrawals (5,637,204) (1,707,101)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES 9,478,626 6,227,388
Increase (decrease) in cash/bank overdraft (6,249) (113,028)
Cash (bank overdraft), beginning of period 7,085 88,834
CASH (BANK OVERDRAFT), END OF PERIOD 836 (24,194)
The accompanying notes are an integral part of these financial statements.
106 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.2%)Signature Income & Growth Fund, Class I 6,832,654 65,032,560 69,283,109
TOTAL INVESTMENTS 65,032,560 69,283,109
OTHER NET ASSETS (-0.2%) (167,136)
NET ASSETS (100%) 69,115,973
The accompanying notes are an integral part of these financial statements.
TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
Scotiabank 4 .0%Toronto-Dominion Bank 3 .7%Royal Bank of Canada 3 .7%Canadian National Railway Company 1 .5%Citigroup 1 .2%Singapore Telecommunications Ltd 1 .2%UBS Group AG 1 .1%Alimentation Couche-Tard 1 .1%Power Corporation of Canada 1 .0%Apple 1 .0%AstraZeneca 1 .0%Novartis AG 0 .9%Enbridge 0 .8%JPMorgan Chase & Company 0 .8%Telstra Corporation Ltd 0 .8%Roche Holding AG 0 .8%NXP Semiconductor 0 .8%Bristol-Myers Squibb Company 0 .7%Province of Quebec, 4 .50%, December 1, 2019 0 .7%Telefonica Deutschland 0 .7%Total SA 0 .7%Province of Ontario, 4 .20%, June 2, 2020 0 .7%Loblaw Companies 0 .6%Thermo Fisher Scientific 0 .6%Nestlé SA 0 .6%
DFS GIF – INCOME AND GROWTH – CI SIGNATURE (cont.)
Balanced and Asset Allocation
107DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveThe objective of this Fund is to provide a steady flow of current income while preserving capital by obtaining exposure primarily to equity, equity related and fixed income securities of Canadian issuers .
Investment StrategyThe Fund invests in a combination of equity, fixed income and derivatives . Broadly diversified by sector and style, preferred and common shares make up portions of the Fund’s investments in equity securities . The fixed income portion of the Fund’s investments is comprised of high-yielding government and corporate bonds, debentures and notes, including some securities that are unrated or have credit ratings below investment grade . The Fund may also invest in real estate investment trusts (REITs), royalty trusts, income trusts and other similar high yielding instruments .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 69,283,109 — — 69,283,109 TOTAL 69,283,109 — — 69,283,109
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 58,358,379 — — 58,358,379 TOTAL 58,358,379 — — 58,358,379
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
108 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s best estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, with all other variables held constant, is as follows:
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmarks % $ $FTSE TMX Canada Universe (15%) 1 .00 103,674 87,392Merrill Lynch High Yield Master II (15%) 2 .00 207,348 174,784S&P/TSX Composite High Dividend (10%) 3 .00 207,348 174,784S&P/TSX (30%) 3 .00 622,044 524,353MSCI All Country World Net (30%) 3 .00 622,044 524,353
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
DFS GIF – INCOME AND GROWTH – CI SIGNATURE (cont.)
Balanced and Asset Allocation
109DFS GUARANTEED INVESTMENT FUNDS
The accompanying notes are an integral part of these financial statements.
DFS GIF – GROWTH AND INCOME – NORTHWEST
Balanced and Asset Allocation
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 389,049 426,267 Investments at fair value through profit
or loss (FVTPL) 155,828,309 155,523,963 Premiums receivable 139,568 157,433
156,356,926 156,107,663
LIABILITIESCurrent LiabilitiesAccrued expenses 385,903 379,303 Withdrawals payable 289,511 178,377 Payable for securities purchased 65,600 142,438
741,014 700,118
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 155,615,912 155,407,545
NET ASSETS PER UNITSeries 3 5.84 5 .68 Series 5 6.12 5 .93 Series 6 5.36 5 .19 Series 7 5.39 5 .21
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEDividends 2 519 657 8 490 588 Changes in fair value:
Net realized gain (loss) on investments 2 451 644 808 861 Net unrealized gain (loss) on investments 2 368 064 861 407
7 339 365 10 160 856
EXPENSESManagement fees and guarantee charge 1,895,296 1,753,839 Operating expenses 439,650 421,004
2,334,946 2,174,843 Withholding taxes 96,913 112,933
2,431,859 2,287,776
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 4,907,506 7,873,080
DATA PER SERIESSERIES 3Increase (Decrease) in Net Assets
from Operations 83,328 143,774 - per unit 0.17 0 .28
Average number of units 494,585 508,027
SERIES 5Increase (Decrease) in Net Assets
from Operations 4,646,737 7,715,995 - per unit 0.19 0 .31
Average number of units 23,955,990 25,018,814
SERIES 6*Increase (Decrease) in Net Assets
from Operations 158,761 13,282 - per unit 0.11 0 .09
Average number of units 1,429,850 144,772
SERIES 7*Increase (Decrease) in Net Assets
from Operations 18,680 29 - per unit 0.19 0 .15
Average number of units 96,706 200
* Beginning of operations in February 2014.
110 DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 155,407,545 139,924,383 Increase (Decrease) in Net Assets
from operations attributable to contract owners 4,907,506 7,873,080
PremiumsSeries 3 105,954 291,395 Series 5 4,784,898 9,669,910 Series 6* 4,058,748 1,467,279 Series 7* 85,577 1,001
9,035,177 11,429,585
WithdrawalsSeries 3 (338,319) (188,294)Series 5 (12,286,962) (7,151,816)Series 6* (1,105,233) (16,718)Series 7* (3,802) —
(13,734,316) (7,356,828)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 155,615,912 151,870,220
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 4,907,506 7,873,080
Adjustments for:Net realized gain (loss) (2,451,644) (808,861)Net unrealized gain (loss) (2,368,064) (861,407)
Proceeds from sale/ maturity of investments 8,989,202 3,338,393
Investments purchased (4,473,840) (13,758,179)Receivable for securities sold — 5,556 Accrued expenses 6,600 38,874 Payable for securities purchased (76,838) 52,360
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES 4,532,922 (4,120,184)
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 9,053,042 11,414,733 Amounts paid on withdrawals (13,623,182) (7,267,595)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES (4,570,140) 4,147,138
Increase (decrease) in cash/bank overdraft (37,218) 26,954
Cash (bank overdraft), beginning of period 426,267 382,204
CASH (BANK OVERDRAFT), END OF PERIOD 389,049 409,158
The accompanying notes are an integral part of these financial statements.
DFS GIF – GROWTH AND INCOME – NORTHWEST (cont.)
Balanced and Asset Allocation
111DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.1%)NEI Northwest Growth and Income Fund, Series I 23,867,102 114,033,950 155,828,309
TOTAL INVESTMENTS 114,033,950 155,828,309
OTHER NET ASSETS (-0.1%) (212,397)
NET ASSETS (100%) 155,615,912
The accompanying notes are an integral part of these financial statements.
TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
NEI Northwest Global Equity Fund 34 .4%NEI Canadian Bond Fund 20 .8%Canadian Imperial Bank of Commerce 4 .0%Toronto-Dominion Bank 3 .9%Manulife Financial Corporation 3 .1%TELUS Corporation 3 .0%Québecor 2 .8%BCE 2 .5%Onex Corporation 2 .2%Sun Life Financial 2 .2%Granite Real Estate Investment Trust 2 .1%Rogers Communications 2 .0%Thomson Reuters Corporation 1 .9%Colliers International Group 1 .9%Bombardier 1 .8%FirstService Corporation 1 .7%Ensign Resource Service Group 1 .5%H&R Real Estate Investment Trust 1 .2%Pason Systems 1 .0%Birchcliff Energy Ltd 0 .8%Vermilion Energy 0 .8%Equitable Group 0 .7%Extendicare 0 .7%TMX Group 0 .7%Badger Daylighting 0 .6%
112 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo provide a consistent stream of income and capital appreciation by investing primarily in a mix of Canadian equities and fixed-income securities .
Investment StrategyTo invest in a diversified portfolio consisting primarily of a balance of large cap equity and investment grade fixed-income securities issued principally by Canadian issuers .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 155,828,309 — — 155,828,309 TOTAL 155,828,309 — — 155,828,309
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 155,523,963 — — 155,523,963TOTAL 155,523,963 — — 155,523,963
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
DFS GIF – GROWTH AND INCOME – NORTHWEST (cont.)
Balanced and Asset Allocation
113DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmarks, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmarks % $ $FTSE TMX Canada Universe (25%) 1 .00 302,186 333,592S&P/TSX (55%) 3 .00 1,994,429 2,201,707MSCI World Net (20%) 3 .00 725,247 800,621
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
114 DFS GUARANTEED INVESTMENT FUNDS
The accompanying notes are an integral part of these financial statements.
DFS GIF – GLOBAL GROWTH – NORTHWEST SELECT
Balanced and Asset Allocation
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 38,139 43,362 Investments at fair value through profit
or loss (FVTPL) 78,819,038 72,780,964 Premiums receivable 212,135 164,718 Receivable for securities sold 8,287 1,620
79,077,599 72,990,664
LIABILITIESCurrent LiabilitiesAccrued expenses 208,397 189,198 Withdrawals payable 80,926 53,772 Payable for securities purchased 130,619 127,348
419,942 370,318
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 78,657,657 72,620,346
NET ASSETS PER UNITSeries 3 7.29 6 .95 Series 5 7.68 7 .30 Series 6 5.40 5 .13 Series 7 5.42 5 .14
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEChanges in fair value:
Net realized gain (loss) on investments 886,772 900,689 Net unrealized gain (loss) on investments 4,147,190 3,691,156
5,033,962 4,591,845
EXPENSESManagement fees and guarantee charge 999,901 911,403 Operating expenses 230,694 217,868
1,230,595 1,129,271
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 3,803,367 3,462,574
DATA PER SERIESSERIES 3Increase (Decrease) in Net Assets
from Operations 208,765 232,817 - per unit 0.35 0 .32
Average number of units 594,950 737,419
SERIES 5Increase (Decrease) in Net Assets
from Operations 3,479,250 3,226,311 - per unit 0.39 0 .35
Average number of units 8,987,298 9,251,582
SERIES 6*Increase (Decrease) in Net Assets
from Operations 107,339 3,423 - per unit 0.15 0 .09
Average number of units 733,010 36,645
SERIES 7*Increase (Decrease) in Net Assets
from Operations 8,013 23 - per unit 0.21 0 .11
Average number of units 38,756 200
* Beginning of operations in February 2014.
115DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 72,620,346 69,738,907 Increase (Decrease) in Net Assets
from operations attributable to contract owners 3,803,367 3,462,574
PremiumsSeries 3 86,734 92,366 Series 5 3,466,258 2,558,017 Series 6* 3,089,532 566,739 Series 7* 91,214 1,001
6,733,738 3,218,123
WithdrawalsSeries 3 (390,071) (888,271)Series 5 (3,959,230) (2,961,084)Series 6* (146,647) (971)Series 7* (3,846) —
(4,499,794) (3,850,326)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 78,657,657 72,569,278
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 3,803,367 3,462,574
Adjustments for:Net realized gain (loss) (886,772) (900,689)Net unrealized gain (loss) (4,147,190) (3,691,156)
Proceeds from sale/ maturity of investments 2,774,695 3,496,639
Investments purchased (3,778,807) (1,783,133)Receivable for securities sold (6,667) 11,405 Accrued expenses 19,199 10,831 Payable for securities purchased 3,271 (42,675)
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES (2,218,904) 563,796
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 6,686,321 3,260,608 Amounts paid on withdrawals (4,472,640) (3,807,846)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES 2,213,681 (547,238)
Increase (decrease) in cash/bank overdraft (5,223) 16,558
Cash (bank overdraft), beginning of period 43,362 33,224
CASH (BANK OVERDRAFT), END OF PERIOD 38,139 49,782
The accompanying notes are an integral part of these financial statements.
116 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.2%)NEI Select Global Growth Portfolio, Series I 6,502,738 55,315,610 78,819,038
TOTAL INVESTMENTS 55,315,610 78,819,038
OTHER NET ASSETS (-0.2%) (161,381)
NET ASSETS (100%) 78,657,657
The accompanying notes are an integral part of these financial statements.
TOP HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
NEI Ethical Global Equity Fund 12 .2%NEI Northwest Global Equity Fund 12 .2%NEI Global Total Return Bond Fund 12 .1%NEI Ethical International Equity Fund 11 .0%NEI Northwest U .S . Dividend Fund 10 .9%NEI Northwest Macro Canadian Asset Allocation Fund 9 .4%NEI Northwest Specialty Equity Fund 8 .2%NEI Northwest Emerging Markets Fund 6 .9%NEI Canadian Bond Fund 5 .1%NEI Northwest Canadian Equity Fund 5 .1%NEI Northwest Canadian Dividend Fund 5 .0%NEI Northwest Specialty Global High Yield Bond Fund 3 .1%Cash and Cash Equivalents -1 .2%
DFS GIF – GLOBAL GROWTH – NORTHWEST SELECT (cont.)
Balanced and Asset Allocation
117DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo provide a balance of capital growth and interest income by investing primarily in units of individual underlying funds in order to gain the desired exposure to the equity and fixed income markets .
Investment StrategyTo emphasize investments in equity underlying funds in order to increase the potential for capital appreciation over a longer investment horizon . The Fund also invests, to a lesser extent, in fixed income underlying funds in order to provide income and capital preservation .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (NOTE 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 78,819,038 — — 78,819,038 TOTAL 78,819,038 — — 78,819,038
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 72,780,964 — — 72,780,964 TOTAL 72,780,964 — — 72,780,964
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 8) .
118 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmarks, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmarks % $ $FTSE TMX Canada Universe (30%) 1 .00 244,633 259,340S&P/TSX (14%) 3 .00 342,487 363,077MSCI World Net (56%) 3 .00 1,369,947 1,452,307
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
DFS GIF – GLOBAL GROWTH – NORTHWEST SELECT (cont.)
Balanced and Asset Allocation
119DFS GUARANTEED INVESTMENT FUNDS
The accompanying notes are an integral part of these financial statements.
DFS GIF – GLOBAL BALANCED – JARISLOWSKY FRASER
Balanced and Asset Allocation
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 587,870 903,740 Investments at fair value through profit
or loss (FVTPL) 157,284,340 152,375,575 Premiums receivable 191,432 34,929 Receivable for securities sold 25,198 —
158,088,840 153,314,244
LIABILITIESCurrent LiabilitiesAccrued expenses 382,059 364,080 Withdrawals payable 385,048 393,494 Payable for securities purchased — 172,235
767,107 929,809
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 157,321,733 152,384,435
NET ASSETS PER UNITSeries 3 7.87 7 .60 Series 5 8.17 7 .87
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEInterest for attribution purposes 946,943 976,867 Dividends 1,417,372 1,245,689 Changes in fair value:
Net realized gain (loss) on investments 2,040,264 1,696,132 Net unrealized gain (loss) on investments 3,900,312 5,002,399
8,304,891 8,921,087
EXPENSESManagement fees and guarantee charge 1,638,998 1,535,557 Operating expenses 667,898 622,850
2,306,896 2,158,407 Withholding taxes 112,481 51,679
2,419,377 2,210,086
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 5,885,514 6,711,001
DATA PER SERIESSERIES 3Increase (Decrease) in Net Assets
from Operations 291,936 375,171 - per unit 0.27 0 .31
Average number of units 1,064,144 1,212,923
SERIES 5Increase (Decrease) in Net Assets
from Operations 5,593,578 6,335,830 - per unit 0.30 0 .33
Average number of units 18,377,844 18,927,082
120 DFS GUARANTEED INVESTMENT FUNDS
The accompanying notes are an integral part of these financial statements.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 152,384,435 144,273,403 Increase (Decrease) in Net Assets
from operations attributable to contract owners 5,885,514 6,711,001
PremiumsSeries 3 651,555 531,588 Series 5 11,430,277 9,539,623
12,081,832 10,071,211
WithdrawalsSeries 3 (753,755) (1,341,542)Series 5 (12,276,293) (8,819,333)
(13,030,048) (10,160,875)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 157,321,733 150,894,740
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 5,885,514 6,711,001
Adjustments for:Net realized gain (loss) (2,040,264) (1,696,132)Net unrealized gain (loss) (3,900,312) (5,002,399)
Proceeds from sale/ maturity of investments 11,050,427 4,260,693
Investments purchased (10,018,616) (4,411,626)Receivable for securities sold (25,198) 23,676 Accrued expenses 17,979 23,070 Payable for securities purchased (172,235) —
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES 797,295 (91,717)
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 11,925,329 10,188,502 Amounts paid on withdrawals (13,038,494) (10,121,266)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES (1,113,165) 67,236
Increase (decrease) in cash/bank overdraft (315,870) (24,481)
Cash (bank overdraft), beginning of period 903,740 736,429
CASH (BANK OVERDRAFT), END OF PERIOD 587,870 711,948
DFS GIF – GLOBAL BALANCED – JARISLOWSKY FRASER (cont.)
Balanced and Asset Allocation
121DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.0%)Jarislowsky Fraser Global Balanced Fund 11,790,359 116,428,788 157,284,340
TOTAL INVESTMENTS 116,428,788 157,284,340
OTHER NET ASSETS (0.0%) 37,393
NET ASSETS (100%) 157,321,733
The accompanying notes are an integral part of these financial statements.
TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
Jarislowsky Fraser International Pooled Fund 20 .5%Toronto-Dominion Bank 1 .6%Jarislowsky Fraser Special Equity Fund 1 .5%Government of Canada, 3 .50%, December 1, 2045 1 .5%Royal Bank of Canada 1 .3%Scotiabank 1 .3%Jarislowsky Fraser Special Bond Fund 1 .2%Province of Ontario, 2 .85%, June 2, 2023 1 .0%Microsoft Corporation 1 .0%Fiserv 1 .0%Government of Canada, 4 .00%, June 1, 2041 0 .9%Toronto-Dominion Bank, Floating Rate, December 14, 2105 0 .9%CVS Caremark Corporation 0 .9%Suncor Energy 0 .9%Bank of Montreal, Floating Rate, April 21, 2021 0 .8%Canadian National Railway Company 0 .8%Enbridge 0 .8%Walgreens Boots Alliance 0 .8%Manulife Financial Corporation 0 .8%Time Warner Cable 0 .8%MetLife Global Funding, 2 .682%, April 16, 2019 0 .8%Government of Canada, 5 .75%, June 1, 2029 0 .8%Province of Manitoba, 4 .05%, September 5, 2045 0 .8%Canadian Natural Resources 0 .7%Metro 0 .7%
122 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo provide investors with an opportunity to achieve a high rate of return by investing in a diversified portfolio consisting of a balance of equity and fixed-income securities of issuers located throughout the world .
Investment StrategyTo provide such an opportunity through a diversified portfolio consisting of a balance of mainly large cap equity and mainly investment grade fixed-income securities of issuers located throughout the world .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds — 157,284,340 — 157,284,340 TOTAL — 157,284,340 — 157,284,340
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds — 152,375,575 — 152,375,575 TOTAL — 152,375,575 — 152,375,575
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note7) .
DFS GIF – GLOBAL BALANCED – JARISLOWSKY FRASER (cont.)
Balanced and Asset Allocation
123DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmarks, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmarks % $ $FTSE TMX Canada 91 Day Treasury Bills (6%) 0 .25 22,374 20,534FTSE TMX Canada Universe (40%) 1 .00 596,645 547,570S&P/TSX (22%) 3 .00 984,464 903,491S&P 500 (16%) 3 .00 715,973 657,084MSCI EAFE Net (16%) 3 .00 715,973 657,084
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
124 DFS GUARANTEED INVESTMENT FUNDS
The accompanying notes are an integral part of these financial statements.
DFS GIF – CANADIAN ASSET ALLOCATION – CI CAMBRIDGE
Balanced and Asset Allocation
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash — 2,001 Investments at fair value through profit
or loss (FVTPL) 8,498,043 6,713,646 Premiums receivable 13,771 1,788 Receivable for securities sold 21,162 —
8,532,976 6,717,435
LIABILITIESCurrent LiabilitiesBank overdraft 4,333 —Accrued expenses 20,044 15,690 Withdrawals payable 18,459 1,035 Payable for securities purchased 13,191 3,290
56,027 20,015
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 8,476,949 6,697,420
NET ASSETS PER UNITSeries 5 6.82 6 .57 Series 6 5.52 5 .32 Series 7 5.56 5 .34
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEDividends 32,062 26,556 Changes in fair value:
Net realized gain (loss) on investments 254,810 9,991 Net unrealized gain (loss) on investments 56,480 337,400
343,352 373,947
EXPENSESManagement fees and guarantee charge 98,519 61,391 Operating expenses 11,652 7,721
110,171 69,112
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 233,181 304,835
DATA PER SERIESSERIES 5Increase (Decrease) in Net Assets
from Operations 200,076 294,889 - per unit 0.24 0 .40
Average number of units 848,307 729,708
SERIES 6*Increase (Decrease) in Net Assets
from Operations 32,309 9,907 - per unit 0.09 0 .19
Average number of units 348,109 52,849
SERIES 7*Increase (Decrease) in Net Assets
from Operations 796 39 - per unit 0.20 0 .20
Average number of units 4,021 200
* Beginning of operations in February 2014.
125DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 6,697,420 3,279,439 Increase (Decrease) in Net Assets
from operations attributable to contract owners 233,181 304,835
PremiumsSeries 5 816,100 2,061,579 Series 6* 1,501,807 500,991 Series 7* 2,000 1,001
2,319,907 2,563,571
WithdrawalsSeries 5 (640,789) (409,047)Series 6* (132,770) (3,210)Series 7* — —
(773,559) (412,257)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 8,476,949 5,735,588
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 233,181 304,835
Adjustments for:Net realized gain (loss) (254,810) (9,991)Net unrealized gain (loss) (56,480) (337,400)
Proceeds from sale/ maturity of investments 526,566 134,948
Investments purchased (1,999,673) (2,271,235)Receivable for securities sold (21,162) (7,067)Accrued expenses 4,354 6,329 Payable for securities purchased 9,901 (100,111)
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES (1,558,123) (2,279,692)
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 2,307,924 2,684,487 Amounts paid on withdrawals (756,135) (411,361)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES 1,551,789 2,273,126
Increase (decrease) in cash/bank overdraft (6,334) (6,566)
Cash (bank overdraft), beginning of period 2,001 (1)
CASH (BANK OVERDRAFT), END OF PERIOD (4,333) (6,567)
The accompanying notes are an integral part of these financial statements.
126 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.2%)Cambridge Canadian Asset Allocation Corporate Class, I Shares 471,328 7,670,913 8,498,043
TOTAL INVESTMENTS 7,670,913 8,498,043
OTHER NET ASSETS (-0.2%) (21,094)
NET ASSETS (100%) 8,476,949
The accompanying notes are an integral part of these financial statements.
TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
Cambridge Bond Fund 19 .0%Brookfield Infrastructure Partners 4 .0%Tourmaline Oil Corporation 3 .8%George Weston 3 .3%US Bancorp 3 .2%Brookfield Asset Management 2 .8%CGI Group 2 .5%Thomson Reuters Corporation 2 .4%Franco-Nevada Corporation 2 .3%Walgreens Boots Alliance 2 .2%ITC Holdings 2 .0%Prologis 1 .9%PrairieSky Royalty Ltd 1 .6%Teledyne Technologies 1 .6%H&R Block 1 .5%Union Pacific Corporation 1 .5%EnCana Corporation 1 .5%Computer Sciences 1 .4%Ecolab 1 .3%Google 1 .2%Electronic Arts 1 .2%Dollar Tree Stores Inc . 1 .1%Allison Transmission Holdings Inc . 1 .1%Amgen 1 .0%Six Flags Entertainment 1 .0%
DFS GIF – CANADIAN ASSET ALLOCATION – CI CAMBRIDGE (cont.)
Balanced and Asset Allocation
127DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveThe objective of this Fund is to achieve a superior total investment return directly or indirectly, in a combination of primarily equity and fixed income securities of Canadian companies . Indirect investments may include convertible securities, derivatives, equity-related securities and securities of other mutual funds .
Investment StrategyThe Fund is actively managed with a disciplined bottom-up selection process . The strategy uses exposure in equity, fixed income instruments and cash and cash equivalents to achieve the Fund objective . The investments in each asset class will vary dependent on market conditions . The Canadian fixed income securities portion of the portfolio will consist mainly of high quality government and corporate bonds while foreign securities can make up part of the equity portion of the portfolio .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 8,498,043 — — 8,498,043 TOTAL 8,498,043 — — 8,498,043
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 6,713,646 — — 6,713,646 TOTAL 6,713,646 — — 6,713,646
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
128 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s best estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, with all other variables held constant, is as follows:
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmarks % $ $FTSE TMX Canada Universe (40%) 1 .00 33,908 26,790S&P/TSX (60%) 3 .00 152,585 120,554
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
DFS GIF – CANADIAN ASSET ALLOCATION – CI CAMBRIDGE (cont.)
Balanced and Asset Allocation
129DFS GUARANTEED INVESTMENT FUNDS
The accompanying notes are an integral part of these financial statements.
DFS GIF – GROWTH – QUOTENTIAL
Balanced and Asset Allocation
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsInvestments at fair value through profit
or loss (FVTPL) 62,622,806 59,847,080 Premiums receivable 58,829 7,443 Receivable for securities sold 2,458 20,474
62,684,093 59,874,997
LIABILITIESCurrent LiabilitiesBank overdraft 1,995 5,487 Accrued expenses 169,618 160,416 Withdrawals payable 59,407 63,227 Payable for securities purchased 23,361 473
254,381 229,603
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 62,429,712 59,645,394
NET ASSETS PER UNITSeries 3 6.04 5 .62 Series 5 6.23 5 .79 Series 6 5.61 5 .20 Series 7 5.64 5 .22
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEInterest for attribution purposes — (384)Changes in fair value:
Net realized gain (loss) on investments 1,691,002 1,068,946 Net unrealized gain (loss) on investments 3,846,942 2,291,308
5,537,944 3,359,870
EXPENSESManagement fees and guarantee charge 847,531 810,753 Operating expenses 171,205 165,463
1,018,736 976,216
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 4,519,208 2,383,654
DATA PER SERIESSERIES 3Increase (Decrease) in Net Assets
from Operations 229,273 127,081 - per unit 0.43 0 .20
Average number of units 527,727 621,548
SERIES 5Increase (Decrease) in Net Assets
from Operations 4,256,830 2,255,698 - per unit 0.45 0 .22
Average number of units 9,413,959 10,267,792
SERIES 6*Increase (Decrease) in Net Assets
from Operations 31,471 860 - per unit 0.15 0 .16
Average number of units 203,166 5,322
SERIES 7*Increase (Decrease) in Net Assets
from Operations 1,634 15 - per unit 0.42 0 .07
Average number of units 3,897 200
* Beginning of operations in February 2014.
130 DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 59,645,394 59,523,769 Increase (Decrease) in Net Assets
from operations attributable to contract owners 4,519,208 2,383,654
PremiumsSeries 3 74,311 329,238 Series 5 804,953 1,423,004 Series 6* 1,363,159 66,895 Series 7* 3,146 1,001
2,245,569 1,820,138
WithdrawalsSeries 3 (371,738) (578,119)Series 5 (3,428,688) (2,599,200)Series 6* (180,033) (70)Series 7* — —
(3,980,459) (3,177,389)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 62,429,712 60,550,172
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 4,519,208 2,383,654
Adjustments for:Net realized gain (loss) (1,691,002) (1,068,946)Net unrealized gain (loss) (3,846,942) (2,291,308)
Proceeds from sale/ maturity of investments 3,570,467 3,035,392
Investments purchased (808,249) (870,231)Receivable for securities sold 18,016 7,652 Accrued expenses 9,202 7,562 Payable for securities purchased 22,888 (918)
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES 1,793,588 1,202,857
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 2,194,183 1,820,062 Amounts paid on withdrawals (3,984,279) (2,995,282)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES (1,790,096) (1,175,220)
Increase (decrease) in cash/bank overdraft 3,492 27,637
Cash (bank overdraft), beginning of period (5,487) (28,285)
CASH (BANK OVERDRAFT), END OF PERIOD (1,995) (648)
SUPPLEMENTAL INFORMATION ON CASH FLOWSInterest paid — 384
The accompanying notes are an integral part of these financial statements.
DFS GIF – GROWTH – QUOTENTIAL (cont.)
Balanced and Asset Allocation
131DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.3%)Franklin Quotential Growth Portfolio 5,527,167 34,969,768 62,622,806
TOTAL INVESTMENTS 34,969,768 62,622,806
OTHER NET ASSETS (-0.3%) (193,094)
NET ASSETS (100%) 62,429,712
The accompanying notes are an integral part of these financial statements.
TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
Franklin Bissett Core Plus Bond Fund 11 .0%Franklin U .S . Core Equity Fund 7 .5%Templeton Asian Growth Fund 6 .6%SPDR Euro Stoxx 50 ETF 6 .6%Franklin Mutual European Fund 6 .3%Franklin Bissett Canadian Equity Fund 5 .8%Franklin Flex Cap Growth Fund 5 .8%Franklin U .S . Rising Dividends Fund 5 .5%Franklin Bisset All Canadian Focus Fund 4 .6%WisdomTree Japan Hedged Equity ETF 3 .3%Franklin Templeton Canadian Large Cap Fund 3 .1%Templeton Global Bond Fund 3 .0%Franklin Mutual Global Discovery Fund 2 .9%iShares MSCI Japan ETF 2 .7%Franklin World Growth Fund 2 .6%Templeton International Stock Fund 2 .1%Franklin European Small-Mid Cap Growth Fund 2 .0%Franklin Bissett Small Cap Fund 1 .9%Franklin Japan Fund 1 .7%Franklin Strategic Income Fund 1 .4%iShares MSCI Japan Small-Cap ETF 1 .4%iShares Intermediate Credit Bond ETF 1 .1%iShares Russell 1000 Value ETF 1 .0%iShares MSCI China ETF 0 .9%BMO Mid Federal Bond Index ETF 0 .9%
132 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo provide a balance of capital growth and interest income by investing primarily in units of an individual underlying fund in order to gain the desired exposure to the equity and fixed income markets .
Investment StrategyTo emphasize investments in a diversified mix of equity underlying funds in order to increase the potential for capital appreciation over a longer investment horizon . The Fund also invests, to a lesser extent, in fixed income underlying funds in order to provide income and capital preservation .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 62,622,806 — — 62,622,806 TOTAL 62,622,806 — — 62,622,806
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 59,847,080 — — 59,847,080 TOTAL 59,847,080 — — 59,847,080
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
DFS GIF – GROWTH – QUOTENTIAL (cont.)
Balanced and Asset Allocation
133DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmarks, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmarks % $ $FTSE TMX Canada Universe (15%) 1 .00 93,328 96,012Barclays Capital Multiverse (Hedged) (5%) 1 .00 31,109 32,004S&P/TSX (35%) 3 .00 653,294 672,086MSCI All Country World Net (45%) 3 .00 839,949 864,111
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
134 DFS GUARANTEED INVESTMENT FUNDS
The accompanying notes are an integral part of these financial statements.
DFS GIF – GLOBAL HIGH INCOME – MULTI-MANAGERS
Balanced and Asset Allocation
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 112,664 55,126 Investments at fair value through profit
or loss (FVTPL) 19,775,479 17,966,980 Investments at fair value through profit
or loss (FVTPL) pledged as collateral 3,235,000 5,056,814 Premiums receivable 61,190 13,484 Receivable for securities sold 66,658 50,283 Cash guarantee received for
repurchase transactions — 92,977 Interest, dividends and other receivables 72,436 56,914
23,323,427 23,292,578
LIABILITIESCurrent LiabilitiesAccrued expenses 54,327 52,116 Withdrawals payable 11,381 11,437 Payable for securities purchased 98,107 151,384 Commitments related to
repurchase transactions — 92,977 163,815 307,914
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 23,159,612 22,984,664
NET ASSETS PER UNITSeries 3 6.08 6 .07 Series 5 6.22 6 .20 Series 6 5.28 5 .26 Series 7 5.31 5 .28
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEInterest for attribution purposes 119,770 118,661 Dividends 452,972 245,959 Revenue from securities lending and
repurchase transactions 1,512 2,624 Foreign exchange gain (loss) on cash 153 (72)Changes in fair value:
Net realized gain (loss) on investments 346,469 565,810 Net unrealized gain (loss) on investments (458,265) 1,251,594
462,611 2,184,576
EXPENSESManagement fees and guarantee charge 291,116 257,869 Operating expenses 48,016 44,102
339,132 301,971 Withholding taxes 31,888 —Commissions and other portfolio
transaction costs 9,989 6,809 381,009 308,780
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 81,602 1,875,796
DATA PER SERIESSERIES 3Increase (Decrease) in Net Assets
from Operations 15,329 193,552 - per unit 0.05 0 .50
Average number of units 332,485 388,432
SERIES 5Increase (Decrease) in Net Assets
from Operations 87,722 1,676,608 - per unit 0.03 0 .52
Average number of units 3,225,526 3,243,925
SERIES 6*Increase (Decrease) in Net Assets
from Operations (21,455) 5,573 - per unit (0.08) 0 .33
Average number of units 259,236 17,107
SERIES 7*Increase (Decrease) in Net Assets
from Operations 6 63 - per unit — 0 .32
Average number of units 3,960 200
* Beginning of operations in February 2014.
135DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 22,984,664 20,113,771 Increase (Decrease) in Net Assets
from operations attributable to contract owners 81,602 1,875,796
PremiumsSeries 3 484,879 293,173 Series 5 1,580,168 1,711,150 Series 6* 679,694 262,861 Series 7* 2,000 1,001
2,746,741 2,268,185
WithdrawalsSeries 3 (661,998) (529,444)Series 5 (1,878,882) (929,782)Series 6* (112,515) (893)Series 7* — —
(2,653,395) (1,460,119)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 23,159,612 22,797,633
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 81,602 1,875,796
Adjustments for:Foreign exchange gain (loss)
on cash (153) 72 Net realized gain (loss) (346,469) (565,810)Net unrealized gain (loss) 458,265 (1,251,594)
Proceeds from sale/ maturity of investments 5,879,936 3,221,786
Investments purchased (5,978,204) (4,154,292)Receivable for securities sold (16,375) (248,584)Cash guarantee received for
repurchase transactions 92,977 —Interest, dividends and other
receivables (15,522) (8,111)Accrued expenses 2,211 6,529 Commitments related to
repurchase transactions (92,977) —Payable for securities purchased (53,277) 279,618
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES 12,014 (844,590)
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 2,699,035 2,234,751 Amounts paid on withdrawals (2,653,451) (1,377,882)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES 45,584 856,869
Effect of exchange rate changes on foreign cash (60) (121)
Increase (decrease) in cash/bank overdraft 57,538 12,158
Cash (bank overdraft), beginning of period 55,126 15,264
CASH (BANK OVERDRAFT), END OF PERIOD 112,664 27,422
SUPPLEMENTAL INFORMATION ON CASH FLOWS FROM/USED IN OPERATING ACTIVITIESInterest received 14,596 11,604 Dividends received,
net of withholding taxes 271,594 237,042 Interest paid 3 20
The accompanying notes are an integral part of these financial statements.
136 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015
Number Fair of Shares Cost Value $ $
EQUITIES (49.5%)
CANADIAN EQUITIES (46.9%)
Energy (13.6%)ARC Resources* 19,200 469,204 410,880 Baytex Energy Corp .* 7,800 142,101 151,554 Crescent Point Energy* 17,225 682,191 441,477 Husky Energy* 11,375 302,242 271,749 Inter Pipeline 14,025 356,888 402,518 Pembina Pipeline Corporation 10,912 434,029 440,517 Vermilion Energy 8,483 468,100 457,658 Whitecap Resources 44,125 497,979 581,568
3,352,734 3,157,921
Materials (2.1%)Agrium 3,225 362,495 426,893 Chemtrade Logistics Income Fund 2,944 60,210 59,763
422,705 486,656
Industrials (2.6%)Russel Metals 9,700 264,295 220,481 WSP Global* 9,350 267,599 367,548
531,894 588,029
Consumer Discretionary (1.1%)Thomson Reuters Corporation 5,126 166,578 243,793
Financials (18.9%)Canadian Apartment Properties Real Estate Investment Trust 6,393 161,765 176,447 Canadian Imperial Bank of Commerce* 7,918 672,921 729,010 Cominar Real Estate Investment Trust, Class U 28,800 524,368 510,624 IGM Financial* 9,050 424,617 360,009 Power Financial Corporation 19,356 706,665 694,300 RioCan Real Estate Investment Trust* 15,550 405,803 416,274 Royal Bank of Canada 8,025 549,723 612,950 Scotiabank 13,500 882,201 870,345
4,328,063 4,369,959
Telecommunication Services (5.9%)BCE* 16,616 882,881 881,645 Manitoba Telecom Services 4,850 157,455 135,364 TELUS Corporation 8,300 323,697 357,149
1,364,033 1,374,158
Utilities (2.7%)Capital Power Corporation 11,190 244,762 241,033 Superior Plus Corp . 30,775 397,078 386,534
641,840 627,567
TOTAL CANADIAN EQUITIES 10,807,847 10,848,083
* Securities pledged as collateral, in part or in whole, through the securities lending program.
DFS GIF – GLOBAL HIGH INCOME – MULTI-MANAGERS (cont.)
Balanced and Asset Allocation
137DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015
Number Fair of Shares Cost Value $ $
FOREIGN EQUITIES (2.6%)
Bermuda Brookfield Renewable Power 16,500 533,897 612,808
TOTAL EQUITIES 11,341,744 11,460,891
Number of Units
INVESTMENT FUNDS (49.6%)
BlackRock® CDN Global Developed Real Estate Index Fund, Class D 552,716 7,981,312 8,520,944 NEI Northwest Specialty Global High Yield Bond Fund, Series I 356,273 2,879,620 2,973,706
TOTAL INVESTMENT FUNDS 10,860,932 11,494,650
Par Value
MONEY MARKET SECURITIES (0.2%)
Canada Treasury Bills 2015-09-10 CAD 55,000 54,938 54,938
PORTFOLIO TRANSACTION COSTS INCLUDED IN THE SECURITIES’ COST (8,717) —
TOTAL INVESTMENTS (99.3%) 22,248,897 23,010,479
OTHER NET ASSETS (0.7%) 149,133
NET ASSETS (100%) 23,159,612
The accompanying notes are an integral part of these financial statements.
138 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015
TOP FIVE HOLDINGS OF THE UNDERLYING FUNDS – unaudited
Security Name Percentage of Portfolio
BLACKROCK CDN GLOBAL DEVELOPED REAL ESTATE INDEX FUND 36.8%
Simon Property Group 4 .3 %Mitsubishi Estate Company 2 .2 %Sun Hung Kai Properties 2 .2 %Public Storage 2 .2 %Mitsui Fudosan Company 2 .1 %
NEI NORTHWEST SPECIALTY GLOBAL HIGH YIELD BOND FUND 12.8%
General Motors Corporation, 4 .875%, October 2, 2023 1 .7 %VRX Escrow Corporation, 5 .875%, May 15, 2023 1 .3 %Sprint Corporation, 7 .25%, September 15, 2021 1 .2 %Consolidated Energy, 6 .75%, October 15, 2019 1 .2 %Fiat Chrysler Automobiles, 5 .25%, April 15, 2023 1 .2 %
DFS GIF – GLOBAL HIGH INCOME – MULTI-MANAGERS (cont.)
Balanced and Asset Allocation
139DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo actively manage a diversified portfolio of income generating securities .
Investment StrategyTo invest primarily in global real estate investment trusts, income trusts and other securities issued by Canadian and non-Canadian governments, financial institutions and companies .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLEquities 11,460,891 — — 11,460,891 Investment Funds 2,973,706 8,520,944 — 11,494,650 Money Market Securities 54,938 — — 54,938 TOTAL 14,489,535 8,520,944 — 23,010,479
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLEquities 11,500,470 — — 11,500,470 Index-Based Investments 70,851 — — 70,851 Investment Funds 2,947,032 8,325,746 — 11,272,778 Money Market Securities 179,695 — — 179,695 TOTAL 14,698,048 8,325,746 — 23,023,794
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Currency RiskAs at June 30, 2015 and December 31, 2014, part of the Net Assets Attributable to Contract Owners are invested in underlying funds which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying funds . Detailed disclosure about the currency risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .As at June 30, 2015 and December 31, 2014, the majority of the Fund’s financial assets and liabilities are denominated in Canadian dollars . As a result, the Fund is not significantly exposed to currency risk .
140 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, part of the Net Assets Attributable to Contract Owners are invested in underlying funds which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying funds . Detailed disclosure about the interest rate risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .As at June 30, 2015 and December 31, 2014, the majority of the Fund’s financial assets and liabilities are non-interest bearing . As a result, the Fund is not subject to significant amounts of risk arising from fluctuations in the prevailing levels of market interest rates .
Concentration RiskPart of the Net Assets Attributable to Contract Owners are invested in underlying funds which are exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying funds . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The following table summarizes the concentration risk, as in percentages of the Net Assets Attributable to Contract Owners:
June 30, 2015MARKET SEGMENT %Canadian Equities
Financials 18 .9 Energy 13 .6 Telecommunication Services 5 .9 Utilities 2 .7 Industrials 2 .6 Materials 2 .1 Consumer Discretionary 1 .1
Foreign Equities 2 .6 Investment Funds 49 .6 Money Market Securities 0 .2 Other Net Assets 0 .7 TOTAL 100
December 31, 2014MARKET SEGMENT %Canadian Equities
Financials 16 .7Energy 15 .3Telecommunication Services 4 .8Materials 3 .1Utilities 3 .1Consumer Discretionary 2 .5Industrials 2 .4Information Technology 0 .9
Foreign Equities 1 .3Investment Funds 49 .0Money Market Securities 0 .8Index-Based Investments 0 .3Other Net Assets (0 .2)TOTAL 100
DFS GIF – GLOBAL HIGH INCOME – MULTI-MANAGERS (cont.)
Balanced and Asset Allocation
141DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Price RiskThe Fund may trade in financial instruments and take positions in traded and over-the-counter instruments .Part of the Net Assets Attributable to Contract Owners are invested in underlying funds which are exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying funds . Detailed disclosure about the price risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmarks, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmarks % $ $Barclays Capital U .S . High Yield 2% Issuer
Capped Bond (15%) 2 .00 66,486 69,499S&P/TSX Composite High Dividend (50%) 3 .00 332,429 347,497FTSE EPRA/NAREIT Developed Net (35%) 3 .00 232,700 243,248
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, part of the Net Assets Attributable to Contract Owners are invested in underlying funds which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying funds . Detailed disclosure about the credit risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .As at June 30, 2015 and December 31, 2014, the Fund had no significant investments in either fixed-income securities, money market securities and derivative financial instruments . As a result, the Fund is not significantly exposed to credit risk .
Securities Lending and Repurchase TransactionsAs part of its securities lending and repurchase transactions, the Fund is exposed to counterparty credit risk . The carrying amount of financial assets pledged as collateral for liabilities is:
$June 30, 2015 —December 31, 2014 89,870
The fair value of the financial assets held as collateral that the fund is permitted to sell or repledge in the absence of default totalled:
$June 30, 2015 —December 31, 2014 58,320
The fair value of financial assets accepted as collateral which have been sold or repledged totalled:
$June 30, 2015 1,211 December 31, 2014 3,104
These financial assets were received as collateral as part of transactions involving reverse repurchase transactions .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, part of the Net Assets Attributable to Contract Owners are invested in underlying funds which are exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying funds . Detailed disclosure about the liquidity risk on the underlying funds can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
142 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
DERECOGNITION OF FINANCIAL ASSETS
Securities lending and repurchase transactionsAs part of transactions involving securities lending or repurchase transactions, the Fund transfers financial assets under terms and conditions providing for their future repurchase . These financial assets remain recognized in the “Investments at fair value through profit or loss pledged as collateral” of the Statement of Financial Position as the Fund retains substantially all the risks and rewards related to these assets .
June 30, 2015 December 31, 2014$ $
Investments at FVTPL pledged as Collateral 3,235,000 5,056,814 Value of Collateral Securities 3,299,700 5,157,949
The Funds require collateral in the form of cash or such other securities as may be acceptable to Desjardins Financial Security and that have an aggregate value of no less than 102% of the loaned securities fair value .
The following table presents the carrying amount and the fair value of financial assets transferred by the Fund but not derecognized as well as the related liabilities recognized in “Commitments related to repurchase transactions” and “Commitments related to securities lending” of the Statement of Financial Position .
Fair Value*June 30, 2015 December 31, 2014
$ $Financial Assets — 89 870 Related Liabilities — 89 876
* The fair value equals carrying amount .
DFS GIF – GLOBAL HIGH INCOME – MULTI-MANAGERS (cont.)
Balanced and Asset Allocation
143DFS GUARANTEED INVESTMENT FUNDS
DFS GIF – DIVIDEND INCOME – BISSETT
Canadian Equity
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash — 4,378 Investments at fair value through profit
or loss (FVTPL) 129,976,711 146,266,605 Premiums receivable 8,998 42,134 Receivable for securities sold 406,489 44,344
130,392,198 146,357,461
LIABILITIESCurrent LiabilitiesBank overdraft 11,542 —Accrued expenses 333,982 362,421 Withdrawals payable 423,921 51,325 Payable for securities purchased — 22,157
769,445 435,903
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 129,622,753 145,921,558
NET ASSETS PER UNITSeries 3 11.23 11 .58 Series 5 11.60 11 .94 Series 6 5.04 5 .18 Series 7 5.08 5 .20
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEDividends 1,674,651 1,635,502 Changes in fair value:
Net realized gain (loss) on investments 3,498,019 1,786,785 Net unrealized gain (loss) on investments (6,878,940) 6,669,742
(1,706,270) 10,092,029
EXPENSESManagement fees and guarantee charge 1,598,362 1,657,523 Operating expenses 508,294 536,812
2,106,656 2,194,335
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS (3,812,926) 7,897,694
DATA PER SERIESSERIES 3Increase (Decrease) in Net Assets
from Operations (867,069) 1,772,952 - per unit (0.33) 0 .59
Average number of units 2,601,834 2,981,627
SERIES 5Increase (Decrease) in Net Assets
from Operations (2,793,316) 6,091,235 - per unit (0.32) 0 .65
Average number of units 8,687,861 9,342,777
SERIES 6*Increase (Decrease) in Net Assets
from Operations (143,607) 32,568 - per unit (0.15) 0 .25
Average number of units 937,731 128,499
SERIES 7*Increase (Decrease) in Net Assets
from Operations (8,934) 939 - per unit (0.07) 0 .12
Average number of units 123,033 7,749
* Beginning of operations in February 2014.
144 DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 145,921,558 141,760,442 Increase (Decrease) in Net Assets
from operations attributable to contract owners (3,812,926) 7,897,694
PremiumsSeries 3 865,761 1,618,696 Series 5 4,342,637 9,127,662 Series 6* 1,326,776 1,587,103 Series 7* 107,831 401,001
6,643,005 12,734,462
WithdrawalsSeries 3 (3,846,614) (5,348,650)Series 5 (14,564,766) (7,769,833)Series 6* (501,827) (13,832)Series 7* (215,677) (750)
(19,128,884) (13,133,065)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 129,622,753 149,259,533
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners (3,812,926) 7,897,694
Adjustments for:Net realized gain (loss) (3,498,019) (1,786,785)Net unrealized gain (loss) 6,878,940 (6,669,742)
Proceeds from sale/ maturity of investments 14,632,405 5,971,617
Investments purchased (1,723,432) (5,082,677)Receivable for securities sold (362,145) (16,929)Accrued expenses (28,439) 23,947 Payable for securities purchased (22,157) 76,659
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES 12,064,227 413,784
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 6,676,141 12,496,920 Amounts paid on withdrawals (18,756,288) (12,927,634)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES (12,080,147) (430,714)
Increase (decrease) in cash/bank overdraft (15,920) (16,930)
Cash (bank overdraft), beginning of period 4,378 (2,300)
CASH (BANK OVERDRAFT), END OF PERIOD (11,542) (19,230)
The accompanying notes are an integral part of these financial statements.
DFS GIF – DIVIDEND INCOME – BISSETT (cont.)
Canadian Equity
145DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.3%)Franklin Bissett Dividend Income Fund, Series O 3,229,245 102,534,863 129,976,711
TOTAL INVESTMENTS 102,534,863 129,976,711
OTHER NET ASSETS (-0.3%) (353,958)
NET ASSETS (100%) 129,622,753
The accompanying notes are an integral part of these financial statements.
TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
Canadian Imperial Bank of Commerce 3 .7%Royal Bank of Canada 3 .2%Toronto-Dominion Bank 3 .1%Power Financial Corporation 3 .0%Scotiabank 3 .0%Bank of Montreal 2 .8%National Bank of Canada 2 .6%Enbridge 2 .6%Enbridge Income Fund Holdings Inc . 2 .3%Thomson Reuters Corporation 2 .3%IGM Financial 2 .2%Canadian National Railway Company 1 .8%Kraft Foods Inc . 1 .7%Mullen Group Ltd 1 .6%Keyera Corporation 1 .6%ARC Resources 1 .5%Wells Fargo & Company 1 .5%JPMorgan Chase & Company 1 .5%Russel Metals 1 .4%General Electric Company 1 .4%Johnson & Johnson 1 .4%Pfizer 1 .3%Capital Power Corporation 1 .3%Fortis 1 .3%Merck & Company 1 .3%
146 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo provide the investor with a consistent return through investment in dividend paying common shares and preferred shares .
Investment StrategyTo invest in a diversified portfolio of large cap Canadian issuer preferred shares and common shares as well as common shares of large cap United States issuers with long histories of dividend growth . From time to time the Fund also invests in investment grade interest-bearing securities to a maximum of 25% of the total assets of the Fund .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 129,976,711 — — 129,976,711 TOTAL 129,976,711 — — 129,976,711
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 146,266,605 — — 146,266,605 TOTAL 146,266,605 — — 146,266,605
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
DFS GIF – DIVIDEND INCOME – BISSETT (cont.)
Canadian Equity
147DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmarks, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmarks % $ $FTSE TMX Canada Universe (15%) 1 .00 178,420 163,315S&P/TSX Preferred Share (5%) 3 .00 178,420 163,315S&P/TSX (60%) 3 .00 2,141,044 1,959,779S&P 500 (20%) 3 .00 713,681 653,260
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
148 DFS GUARANTEED INVESTMENT FUNDS
DFS GIF – CANADIAN DIVIDEND – FIERA
Canadian Equity
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 134,770 —Investments at fair value through profit
or loss (FVTPL) 96,845,381 105,150,327 Investments at fair value through profit
or loss (FVTPL) pledged as collateral 16,587,041 22,579,386 Premiums receivable 32,090 80,260 Receivable for securities sold 148,615 2,462,303 Cash guarantee received for
repurchase transactions 459,105 269,986 Interest, dividends and other receivables 248,847 254,995
114,455,849 130,797,257
LIABILITIESCurrent LiabilitiesBank overdraft — 209,544 Accrued expenses 241,440 264,896 Withdrawals payable 338,456 129,730 Payable for securities purchased 62,216 1,312,457 Commitments related to
repurchase transactions 459,105 269,986 1,101,217 2,186,613
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 113,354,632 128,610,644
NET ASSETS PER UNITSeries 1 9.82 10 .31 Series 3 10.82 11 .33 Series 5 10.98 11 .48 Series 6 4.93 5 .16 Series 7 4.96 5 .18
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEInterest for attribution purposes 28,209 61,298 Dividends 2,088,802 2,542,707 Revenue from securities lending and
repurchase transactions 9,159 9,426 Foreign exchange gain (loss) on cash 30 (463)Changes in fair value:
Net realized gain (loss) on investments 869,516 4,370,942 Net unrealized gain (loss) on investments (6,687,607) 5,527,414
(3,691,891) 12,511,324
EXPENSESManagement fees and guarantee charge 1,188,037 1,317,935 Operating expenses 341,414 381,263
1,529,451 1,699,198 Commissions and other portfolio
transaction costs 68,203 97,764 1,597,654 1,796,962
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS (5,289,545) 10,714,362
DATA PER SERIESSERIES 1Increase (Decrease) in Net Assets
from Operations (201,703) 373,036 - per unit (0.47) 0 .76
Average number of units 427,624 490,216
SERIES 3Increase (Decrease) in Net Assets
from Operations (900,082) 1,853,763 - per unit (0.49) 0 .87
Average number of units 1,839,932 2,132,958
SERIES 5Increase (Decrease) in Net Assets
from Operations (4,146,468) 8,480,910 - per unit (0.49) 0 .89
Average number of units 8,477,745 9,541,896
SERIES 6*Increase (Decrease) in Net Assets
from Operations (40,415) 6,586 - per unit (0.30) 0 .43
Average number of units 134,733 15,316
SERIES 7*Increase (Decrease) in Net Assets
from Operations (877) 67 - per unit (0.22) 0 .33
Average number of units 3,958 200
* Beginning of operations in February 2014.
149DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 128,610,644 137,802,153 Increase (Decrease) in Net Assets
from operations attributable to contract owners (5,289,545) 10,714,362
PremiumsSeries 1 24,541 451,397 Series 3 357,477 414,641 Series 5 1,531,073 1,626,523 Series 6* 475,832 175,475 Series 7* — 1,001
2,388,923 2,669,037
WithdrawalsSeries 1 (433,768) (763,208)Series 3 (2,336,295) (2,526,774)Series 5 (9,497,605) (8,855,772)Series 6* (87,722) (1,177)Series 7* — —
(12,355,390) (12,146,931)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 113,354,632 139,038,621
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners (5,289,545) 10,714,362
Adjustments for:Foreign exchange gain (loss)
on cash (30) 463 Net realized gain (loss) (869,516) (4,370,942)Net unrealized gain (loss) 6,687,607 (5,527,414)
Proceeds from sale/ maturity of investments 42,569,944 81,492,868
Investments purchased (34,091,255) (73,507,813)Receivable for securities sold 2,313,688 (1,493,137)Cash guarantee received for
securities lending — 713,869 Cash guarantee received for
repurchase transactions (189,119) 4,466 Interest, dividends and other
receivables 6,148 (89,858)Accrued expenses (23,456) 3,470 Commitments related to
securities lending — (713,869)Commitments related to
repurchase transactions 189,119 (4,466)Payable for securities purchased (1,250,241) 2,225,948
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES 10,053,344 9,447,947
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 2,437,093 2,764,713 Amounts paid on withdrawals (12,146,664) (12,160,633)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES (9,709,571) (9,395,920)
Effect of exchange rate changes on foreign cash 541 (959)
Increase (decrease) in cash/bank overdraft 344,314 51,068
Cash (bank overdraft), beginning of period (209,544) (32,327)
CASH (BANK OVERDRAFT), END OF PERIOD 134,770 18,741
SUPPLEMENTAL INFORMATION ON CASH FLOWS FROM/USED IN OPERATING ACTIVITIESInterest received 26,519 67,573 Dividends received,
net of withholding taxes 2,095,393 2,441,796 Interest paid 36 291
The accompanying notes are an integral part of these financial statements.
150 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015
Number Fair of Shares Cost Value $ $
EQUITIES (98.0%)
PREFERRED SHARES (29.6%)
Energy (5.1%)AltaGas Series A, 5 .000%, (floating rate from 2015-09-30), 2049-09-30 23,900 597,947 434,263 Enbridge Series 3, 4 .000%, (floating rate from 2019-09-01), Perpetual* 23,200 567,537 413,192 Series 7, 4 .400%, (floating rate from 2019-01-03), Perpetual 20,600 521,977 404,790 Series 13, 4 .400%, (floating rate from 2020-06-01), Perpetual 4,900 122,451 99,225 Series B, 4 .000%, (floating rate from 2017-06-01), Perpetual 13,500 342,360 237,600 Series H, 4 .000%, (floating rate from 2018-09-01), Perpetual* 12,900 325,166 217,494 Series P, 4 .000%, (floating rate from 2019-03-01), Perpetual 25,500 646,893 471,495 Series R, 4 .000%, (floating rate from 2019-06-01), Perpetual 29,400 742,316 545,370 Pembina Pipeline Corporation Series 1, 4 .250%, (floating rate from 2018-12-01), Perpetual 24,400 530,729 451,400 Series 7, 4 .500%, (floating rate from 2019-12-01), Perpetual 20,200 498,067 429,250 TransCanada Corp . Series 1, 3 .266%, (floating rate from 2019-12-31), Perpetual 31,100 757,387 634,751 Series 2, floating rate, Perpetual 23,500 572,302 438,510 Series 5, 4 .400%, (floating rate from 2016-01-30), Perpetual 30,600 757,710 500,310 TransCanada PipeLines Series 3, floating rate, Perpetual* 30,883 710,282 460,157
Series 7, 4 .400%, (floating rate from 2019-04-30), Perpetual 2,472 61,529 54,878
7,754,653 5,792,685
Financials (19.1%)Bank of Montreal Series 17, 2 .669%, (floating rate from 2018-08-25), 2049-12-31 15,050 385,686 362,705 Series 25, 3 .900%, (floating rate from 2016-08-25), Perpetual* 12,300 304,726 289,542 Series 27, 4 .000%, (floating rate from 2019-05-25), Perpetual* 44,400 1,099,413 1,032,300 Series 29, 3 .900%, (floating rate from 2019-08-25), Perpetual* 21,200 530,845 482,300 Series 31, 3 .800%, (floating rate from 2019-11-25), Perpetual 11,300 282,864 254,250 Series 33, 3 .800%, (floating rate from 2020-08-25), Perpetual 35,100 866,816 868,725 Brookfield Asset Management Series 34, 4 .200%, (floating rate rate from 2019-03-31), Perpetual 4,948 123,949 106,926 Brookfield Office Properties Series AA, 4 .750%, (floating rate from 2019-12-31), Perpetual* 37,500 937,201 772,875 Series H, 5 .750%, (floating rate from 2015-08-03), Convertible, Perpetual 25,795 663,674 646,165 Canadian Imperial Bank of Commerce Series 39, 3 .900%, (floating rate from 2019-07-31), Perpetual 83,000 2,097,887 1,913,150 Series 41, 3 .750%, (floating rate from 2020-01-31), Perpetual 37,900 898,799 855,024 Canadian Western Bank Series 5, 4 .400%, (floating rate from 2019-04-30), Perpetual* 11,600 290,957 274,572 Dundee Corporation Series 4, 5 .000%, Perpetual 8,200 146,365 142,762 Fairfax Financial Holdings Series M, 4 .750%, (floating rate from 2020-03-31), Perpetual 3,900 95,199 93,210 Great-West Lifeco Series F, 5 .900%, Perpetual* 29,600 754,402 756,280 Series N, 3 .650%, (floating rate from 2015-12-31), Perpetual 19,400 339,306 331,740 Series P, 5 .400%, 2049-12-31 25,000 627,280 636,500
* Securities pledged as collateral, in part or in whole, through the securities lending program.
DFS GIF – CANADIAN DIVIDEND – FIERA (cont.)
Canadian Equity
151DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015
Number Fair of Shares Cost Value $ $
PREFERRED SHARES (cont.)
Financials (cont.)
Manulife Financial Corporation Series 2, 4 .650%, Perpetual 24,400 538,441 552,904 Series 11, 4 .000%, (floating rate from 2018-03-19), Perpetual* 5,200 131,035 128,960 Series 13, 3 .800%, Perpetual 7,700 178,678 173,250 Series 15, Class 1, 3 .900%, Perpetual 4,300 94,039 97,008 Series 19, 3 .800%, (floating rate from 2020-03-19), Perpetual 6,100 152,554 138,348 Power Financial Corporation Series S, 4 .800%, Perpetual 14,600 329,384 349,816 RioCan Real Estate Investment Trust Series A, 5 .250%, (floating rate from 2016-03-31), Perpetual 23,600 557,642 470,820 Royal Bank of Canada Series AD, 4 .500%, (floating rate from 2015-08-04), Perpetual 23,200 586,788 588,584 Series AZ, 4 .000%, (floating rate from 2019-05-24), Perpetual 30,500 752,398 715,225 Series BB, 3 .900%, Perpetual 43,200 1,096,062 991,440 Series BD, 3 .600%, (floating rate from 2020-05-24), Perpetual 31,300 784,825 774,675 Series BF, 3 .600%, (floating rate from 2020-11-24), Perpetual 21,400 521,090 522,374 Series BH, 4 .900%, (floating rate from 2020-11-24), Perpetual 12,900 319,546 324,048 Series W, 4 .900%, (floating rate from 2015-08-03), Convertible, Perpetual 43,600 1,084,334 1,094,796 Scotiabank Series 14, 4 .500%, Perpetual 17,700 452,491 451,350 Series 15, 4 .500%, Perpetual 43,100 1,067,740 1,103,360 Series 16, 5 .250%, Perpetual 14,900 384,976 385,314 Series 18, 5 .000%, Perpetual 15,700 402,162 397,053 Sun Life Financial Series 1, 4 .750%, Perpetual 30,600 686,856 722,160 Toronto-Dominion Bank 3 .900%, Perpetual* 9,700 228,823 223,100 Series 3, 3 .800%, (floating rate from 2019-07-31), Perpetual* 42,700 1,069,804 984,235 Series T, 2 .624%, (floating rate from 2018-07-31), Perpetual 9,500 238,960 229,140 Series Z, floating rate, Perpetual 18,000 458,530 433,980
22,562,527 21,670,966
Telecommunication Services (2.0%)BCE Series AD, floating rate, Perpetual* 14,800 315,301 259,148 Series AE, floating rate, Perpetual 40,100 943,361 696,537 Series AG, 4 .500%, (floating rate from 2016-05-01), Perpetual 31,700 688,875 543,655 Series AI, 4 .150%, (floating rate from 2016-08-01), Perpetual 23,700 469,272 406,692 Series AM, 4 .850%, (floating rate from 2016-03-31), Perpetual 12,000 276,602 207,000 Series S, floating rate, Perpetual 12,400 277,842 215,388
2,971,253 2,328,420
* Securities pledged as collateral, in part or in whole, through the securities lending program.
152 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015
Number Fair of Shares Cost Value $ $
PREFERRED SHARES (cont.)
Utilities (3.4%)Algonquin Power & Utilities Corp . Series A, 4 .500%, (floating rate from 2018-12-31), Perpetual 4,100 101,803 83,025 Canadian Utilities Series 4, 3 .800%, Perpetual 4,900 118,633 80,605 Series AA, 4 .900%, Perpetual 22,218 547,729 532,565 Series CC, 4 .500%, Perpetual 17,900 430,144 394,695 Series Y, 4 .000%, (floating rate from 2017-06-01), 2049-12-31* 6,600 160,167 163,680 Emera Series A, 4 .400%, (floating rate from 2015-08-15), Perpetual 15,700 329,371 262,190 Series C, 4 .100%, (floating rate from 2018-08-15), Perpetual* 7,700 176,899 170,632 Fortis Series J, 4 .750%, Perpetual 16,100 394,204 379,638 Series K, 4 .000%, (floating rate from 2019-01-03), Perpetual* 22,500 534,210 483,075 Series M, 4 .100%, (floating rate from 2019-12-01), Perpetual 29,800 747,835 711,326 Northland Power Series 1, 5 .250%, (floating rate from 2015-09-30), Perpetual 20,800 407,680 344,240 Valener Series A, 4 .350%, Perpetual 8,600 223,063 208,034
4,171,738 3,813,705
TOTAL PREFERRED SHARES 37,460,171 33,605,776
COMMON SHARES (68.4%)
Energy (12.7%)ARC Resources* 42,800 947,820 915,920 Canadian Natural Resources 105,000 3,472,713 3,560,550 Enbridge* 43,700 2,303,056 2,552,517 Enerplus Corporation* 90,000 2,250,688 986,400 Suncor Energy 116,324 3,511,823 4,001,546 Veresen 15,500 321,507 302,250 Vermilion Energy 13,504 519,913 728,541 Whitecap Resources 100,600 1,059,645 1,325,908
14,387,165 14,373,632
Materials (5.9%)Agrium 20,880 1,667,991 2,763,886 AuRico Gold 163,400 1,288,997 583,338 First Quantum Minerals 108,100 1,794,689 1,765,273 Goldcorp 80,100 2,702,102 1,623,627
7,453,779 6,736,124
Industrials (6.8%)Canadian National Railway Company 54,800 1,782,528 3,948,888 Finning International 59,300 1,465,457 1,392,957 Russel Metals 37,300 1,037,693 847,829 WSP Global* 40,000 1,431,763 1,572,400
5,717,441 7,762,074
* Securities pledged as collateral, in part or in whole, through the securities lending program.
DFS GIF – CANADIAN DIVIDEND – FIERA (cont.)
Canadian Equity
153DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015
Number Fair of Shares Cost Value $ $
COMMON SHARES (cont.)
Consumer Discretionary (6.8%)Gildan Activewear* 73,800 1,091,307 3,061,962 Magna International, Class A 38,256 2,210,511 2,681,746 Quebecor, Class B* 32,800 856,026 1,024,016 Thomson Reuters Corporation* 19,900 694,631 946,444
4,852,475 7,714,168
Consumer Staples (3.0%)Empire Company, Class A 11,800 895,541 1,038,046 Loblaw Companies 37,800 1,917,511 2,384,424
2,813,052 3,422,470
Financials (27.2%)Brookfield Asset Management, Class A* 54,600 2,377,285 2,382,744 Canadian Imperial Bank of Commerce* 22,800 2,288,609 2,099,196 CI Financial 21,232 671,151 713,395 Cominar Real Estate Investment Trust, Class U* 59,177 1,078,803 1,049,208 IGM Financial* 25,600 1,380,270 1,018,368 Intact Financial Corporation 25,300 1,484,089 2,195,787 Manulife Financial Corporation 192,000 4,129,390 4,456,320 Royal Bank of Canada 81,066 4,436,910 6,191,821 Scotiabank 81,700 4,084,344 5,267,199 Toronto-Dominion Bank 102,208 3,448,341 5,421,112
25,379,192 30,795,150
Information Technology (1.3%)Open Text Corporation 28,200 1,442,333 1,430,586
Telecommunication Services (2.2%)TELUS Corporation 57,000 1,594,715 2,452,710
Utilities (2.5%)Fortis 46,500 1,402,512 1,631,220 Superior Plus Corp . 92,800 1,287,415 1,165,569
2,689,927 2,796,789
TOTAL COMMON SHARES 66,330,079 77,483,703
TOTAL EQUITIES 103,790,250 111,089,479
* Securities pledged as collateral, in part or in whole, through the securities lending program.
154 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015
Par Fair Value Cost Value $ $
MONEY MARKET SECURITIES (1.2%)
Canada Treasury Bills 2015-08-13* CAD 170,000 169,803 169,803 2015-08-27 CAD 1,155,000 1,153,510 1,153,510
TOTAL MONEY MARKET SECURITIES 1,323,313 1,323,313
BONDS (0.9%)
Government of Canada (0.3%)Government of Canada 1 .500%, 2017-02-01 CAD 29,000 29,430 29,466 1 .250%, 2017-08-01 CAD 100,000 101,369 101,581 2 .500%, 2024-06-01* CAD 55,000 58,044 59,098 2 .250%, 2025-06-01* CAD 13,000 13,538 13,669 3 .500%, 2045-12-01* CAD 48,000 59,580 60,458 PSP Capital Series 7, 3 .290%, 2024-04-04* CAD 5,000 4,997 5,383 Royal Office Finance Series A, 5 .209%, 2032-11-12 CAD 23,811 26,529 29,592
293,487 299,247
Provincial Governments and Crown Corporations (0.3%)Ontario Infrastructure 4 .700%, 2037-06-01 CAD 15,000 15,020 17,743 Ontario School Boards Financing Corporation Series 04A1, 5 .483%, 2029-11-26 CAD 29,329 31,300 35,138 Private Placement, Series 06A1, 5 .070%, 2031-04-18 CAD 38,598 38,598 44,311 Province of Alberta 3 .900%, 2033-12-01 CAD 15,000 14,934 16,909 3 .450%, 2043-12-01 CAD 5,000 4,551 5,286 Province of British Columbia 3 .200%, 2044-06-18* CAD 5,000 4,620 5,093 Province of Ontario 3 .150%, 2022-06-02* CAD 11,000 11,035 11,869 2 .850%, 2023-06-02 CAD 70,000 67,291 73,463 3 .500%, 2024-06-02* CAD 3,000 3,076 3,279 3 .450%, 2045-06-02 CAD 6,000 5,686 6,301 Province of Quebec 4 .500%, 2019-12-01* CAD 35,000 38,703 39,829 3 .500%, 2022-12-01* CAD 39,000 40,481 42,961 2 .750%, 2025-09-01* CAD 4,000 4,187 4,090 4 .250%, 2043-12-01 CAD 9,000 9,210 10,667 TCHC Issuer Trust Series B, 5 .395%, 2040-02-22 CAD 20,000 20,000 26,022
308,692 342,961
* Securities pledged as collateral, in part or in whole, through the securities lending program.
DFS GIF – CANADIAN DIVIDEND – FIERA (cont.)
Canadian Equity
155DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015
Par Fair Value Cost Value $ $
BONDS (cont.)
Corporations (0.3%)Bank of Montreal 2 .390%, 2017-07-12 CAD 8,000 8,149 8,187 2 .240%, 2017-12-11 CAD 5,000 4,995 5,115 3 .979%, (floating rate from 2016-07-08), 2021-07-08* CAD 15,000 15,617 15,382 3 .120%, (floating rate from 2019-09-19), 2024-09-19* CAD 7,000 7,071 7,243 Caisse Centrale Desjardins 2 .795%, 2018-11-19 CAD 10,000 10,068 10,437 2 .443%, 2019-07-17 CAD 10,000 10,000 10,352 Canadian Imperial Bank of Commerce 2 .350%, 2017-10-18* CAD 26,000 26,541 26,640 2 .350%, 2019-06-24 CAD 3,000 2,997 3,104 3 .000%, (floating rate from 2019-10-28), 2024-10-28* CAD 7,000 7,067 7,214 Canadian Utilities 4 .543%, 2041-10-24 CAD 2,000 2,119 2,216 Capital City Link Series A, 4 .386%, 2046-03-31 CAD 7,000 7,000 7,367 Cominar Real Estate Investment Trust Series 9, 4 .164%, 2022-06-01* CAD 5,000 5,000 5,039 CSS (FSCC) Partnership 6 .915%, 2042-07-31 CAD 4,913 6,306 6,560 Health Montréal Collective, Private Placement Series 144A, 6 .721%, 2049-09-30 CAD 13,000 15,267 17,099 Hospital Infrastructure Series A, 5 .439%, 2045-01-31 CAD 10,000 10,000 11,903 Integrated Team Solutions SJHC 5 .946%, 2042-11-30 CAD 5,000 5,035 6,187 North West Redwater Partnership Series A, 3 .200%, 2024-07-22 CAD 5,000 4,992 5,173 Northland Power Series A, 4 .958%, 2032-12-31 CAD 4,787 4,787 5,446 Plenary Health Care Partnerships Humber 4 .895%, 2039-05-31 CAD 10,000 10,000 11,141 Reliance Series 1, 4 .574%, 2017-03-15 CAD 7,000 7,000 7,232 Series 2, 5 .187%, 2019-03-15 CAD 4,000 4,000 4,296 Royal Bank of Canada 2 .260%, 2018-03-12* CAD 10,000 10,256 10,235 2 .820%, 2018-07-12 CAD 10,000 9,998 10,419 3 .040%, (floating rate from 2019-07-17), 2024-07-17 CAD 5,000 4,999 5,172 2 .990%, (floating rate from 2019-12-06), 2024-12-06 CAD 21,000 21,068 21,910 2 .480%, (floating rate from 2020-06-04), 2025-06-04 CAD 10,000 9,998 9,981 Scotiabank 2 .370%, 2018-01-11* CAD 26,000 25,990 26,671 2 .242%, 2018-03-22 CAD 10,000 10,000 10,232 3 .270%, 2021-01-11 CAD 8,000 8,000 8,529 SNC-Lavalin Innisfree McGill Finance 6 .632%, 2044-06-30 CAD 3,976 4,558 5,196
* Securities pledged as collateral, in part or in whole, through the securities lending program.
156 DFS GUARANTEED INVESTMENT FUNDS
* Securities pledged as collateral, in part or in whole, through the securities lending program.The accompanying notes are an integral part of these financial statements.
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015
Par Fair Value Cost Value $ $
Corporations (cont.)Teranet Income Fund 6 .100%, 2041-06-17 CAD 12,000 12,346 13,689 Toronto-Dominion Bank 2 .447%, 2019-04-02 CAD 5,000 5,000 5,181 3 .226%, 2024-07-24* CAD 5,000 5,000 5,218 2 .692%, (floating rate from 2020-06-24), 2025-06-24 CAD 5,000 5,000 5,036 4 .779%, (floating rate from 2016-12-14), 2105-12-14 CAD 20,000 21,448 20,915 5 .763%, (floating rate from 2017-12-18), 2106-12-18 CAD 25,000 27,235 27,497
354,907 369,214
TOTAL BONDS 957,086 1,011,422
ASSET-BACKED SECURITIES (0.0%)CHIP Mortgage Trust 3 .663%, 2038-09-25 CAD 6,000 6,000 6,343
MORTGAGE-BACKED SECURITIES (0.0%)Real Estate Asset Liquidity Trust 4 .449%, 2016-08-12 CAD 10,000 1,680 1,865
PORTFOLIO TRANSACTION COSTS INCLUDED IN THE SECURITIES’ COST (56,496) —
TOTAL INVESTMENTS (100.1%) 106,021,833 113,432,422
OTHER NET ASSETS (-0.1%) (77,790)
NET ASSETS (100%) 113,354,632
DFS GIF – CANADIAN DIVIDEND – FIERA (cont.)
Canadian Equity
157DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo provide the investor with a balance of capital growth and dividend income through investments primarily in large, financially stable corporations .
Investment StrategyTo emphasize investments in high-yield preferred shares and a core, limited-turnover portfolio of common shares . The investment approach benefits investors due to the preferential tax treatment on dividends received and the deferral of realized gains generated on common shares .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLEquities 111,089,479 — — 111,089,479 Bonds 562,759 448,663 — 1,011,422 Mortgage-Backed Securities — 1,865 — 1,865 Asset-Backed Securities — 6,343 — 6,343 Money Market Securities 1,323,313 — — 1,323,313 TOTAL 112,975,551 456,871 — 113,432,422
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLEquities 126,723,095 — — 126,723,095 Bonds 590,465 405,580 — 996,045 Mortgage-Backed Securities — 4,343 — 4,343 Asset-Backed Securities — 6,230 — 6,230 TOTAL 127,313,560 416,153 — 127,729,713
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Fund’s financial assets and liabilities are denominated in Canadian dollars . As a result, the Fund is not significantly exposed to currency risk .
158 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskThe following table summarizes the Fund’s exposure to interest rate risk . It includes the Fund’s financial assets and liabilities at fair value, categorized by the earlier of contractual re-pricing or maturity dates . The table also illustrates the impact on the Net Assets Attributable to Contract Owners, had prevailing interest rates changed by 0 .25%, assuming a parallel shift in the yield curve, with all other variables held constant .
Less than 1 Year 1 to 5 Years 5 to 10 Years
Greater than 10 Years Total
Impact on Net Assets
Attributable to Contract Owners
$ $ $ $ $ $June 30, 2015 1,458,083 431,190 233,681 354,757 2,477,711 18,429
December 31, 2014 (175,499) 421,823 216,370 334,379 797,073 17,877
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Concentration Risk
The following table summarizes the concentration risk, as in percentages of the Net Assets Attributable to Contract Owners:
June 30, 2015MARKET SEGMENT %Equities
Financials 46 .3 Energy 17 .8 Industrials 6 .8 Consumer Discretionary 6 .8 Materials 5 .9 Utilities 5 .9 Telecommunication Services 4 .2 Consumer Staples 3 .0 Information Technology 1 .3
Money Market Securities 1 .2 Bonds 0 .9Other Net Assets (0 .1)TOTAL 100
December 31, 2014MARKET SEGMENT %Equities
Financials 46 .1Energy 19 .2Industrials 7 .1Consumer Discretionary 5 .7Materials 5 .5Utilities 5 .4Telecommunication Services 4 .5Consumer Staples 3 .1Information Technology 1 .9
Bonds 0 .8Other Net Assets 0 .7TOTAL 100
DFS GIF – CANADIAN DIVIDEND – FIERA (cont.)
Canadian Equity
159DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Price RiskThe Fund may trade in financial instruments and take positions in traded and over-the-counter instruments .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmarks, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in PriceImpact on Net Assets
Attributable to Contract Owners
June 30, 2015 December 31, 2014Benchmarks % $ $FTSE TMX Canada Universe (5%) 1 .00 61,889 70,624S&P/TSX Dividend (60%) 3 .00 2,228,019 2,542,474BMO 50 Preferred Share (35%) 3 .00 1,299,678 1,483,110
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskThe Fund’s credit risk is mainly concentrated in fixed-income securities . Their fair values include consideration of the issuers’ creditworthiness and accordingly, represent the Fund’s maximum exposure to credit risk .The investment grade for Canadian fixed-income securities and money market securities is rated by the Dominion Bond Rating Service (“DBRS”), Standard & Poor’s or Moody’s . The investment grade for foreign fixed-income securities and money market securities is rated by Standard & Poor’s, Moody’s or Fitch . In cases where the credit rating agencies do not agree on a credit rating for fixed-income securities and money market securities, they will be classified following these rules:• If two credit ratings are available, but the ratings are different, the lowest rating is used;• If three credit ratings are available, the most common credit rating is used;• If all three credit rating agencies have different ratings, the middle credit rating is used .The credit rating is then converted to DBRS format . Generally, the greater the credit rating of a security, the lower the probability of it defaulting on its obligations .
Portfolio’s Fixed-Income Securities by Credit Rating Category
Credit rating Percentage of Fixed-Income SecuritiesJune 30, 2015 December 31, 2014
% %AAA 33 36 AA 35 34 A 26 24 BBB 6 6 TOTAL 100 100
Securities Lending and Repurchase TransactionsAs part of its securities lending and repurchase transactions, the Fund is exposed to counterparty credit risk . The carrying amount of financial assets pledged as collateral for liabilities is:
$June 30, 2015 460,000 December 31, 2014 258,446
The fair value of the financial assets held as collateral that the fund is permitted to sell or repledge in the absence of default totalled:
$June 30, 2015 300,810 December 31, 2014 169,327
160 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
The fair value of financial assets accepted as collateral which have been sold or repledged totalled:
$June 30, 2015 401 December 31, 2014 9,013
These financial assets were received as collateral as part of transactions involving reverse repurchase transactions .
Liquidity RiskFor further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
DERECOGNITION OF FINANCIAL ASSETSSecurities lending and repurchase transactionsAs part of transactions involving securities lending or repurchase transactions, the Fund transfers financial assets under terms and conditions providing for their future repurchase . These financial assets remain recognized in the “Investments at fair value through profit or loss pledged as collateral” of the Statement of Financial Position as the Fund retains substantially all the risks and rewards related to these assets .
June 30, 2015 December 31, 2014$ $
Investments at FVTPL pledged as Collateral 16,587,041 22,579,386 Value of Collateral Securities 16,918,783 23,030,979
The Funds require collateral in the form of cash or such other securities as may be acceptable to Desjardins Financial Security and that have an aggregate value of no less than 102% of the loaned securities fair value .
The following table presents the carrying amount and the fair value of financial assets transferred by the Fund but not derecognized as well as the related liabilities recognized in “Commitments related to repurchase transactions” and “Commitments related to securities lending” of the Statement of Financial Position .
Fair Value*June 30, 2015 December 31, 2014
$ $Financial Assets 460,000 258,446 Related Liabilities 459,007 260,981
* The fair value equals carrying amount .
DFS GIF – CANADIAN DIVIDEND – FIERA (cont.)
Canadian Equity
161DFS GUARANTEED INVESTMENT FUNDS
DFS GIF – CANADIAN DIVIDEND – NORTHWEST
Canadian Equity
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 77,075 57,834 Investments at fair value through profit
or loss (FVTPL) 19,772,076 18,087,070 Premiums receivable 11,255 8,966 Receivable for securities sold 1,133 —
19,861,539 18,153,870
LIABILITIESCurrent LiabilitiesAccrued expenses 51,168 45,771 Withdrawals payable 13,723 3,747 Payable for securities purchased 19,252 6,100
84,143 55,618
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 19,777,396 18,098,252
NET ASSETS PER UNITSeries 5 7.11 7 .14 Series 6 5.42 5 .44 Series 7 5.44 5 .45
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEDividends 228,146 183,501 Changes in fair value:
Net realized gain (loss) on investments 136,015 61,468 Net unrealized gain (loss) on investments (157,228) 1,088,248
206,933 1,333,217
EXPENSESManagement fees and guarantee charge 268,455 193,378 Operating expenses 38,754 28,725
307,209 222,103
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS (100,276) 1,111,114
DATA PER SERIESSERIES 5Increase (Decrease) in Net Assets
from Operations (79,645) 1,104,436 - per unit (0.03) 0 .52
Average number of units 2,555,578 2,130,108
SERIES 6*Increase (Decrease) in Net Assets
from Operations (20,611) 6,668 - per unit (0.08) 0 .32
Average number of units 262,039 20,686
SERIES 7*Increase (Decrease) in Net Assets
from Operations (20) 10 - per unit (0.01) 0 .01
Average number of units 3,864 655
* Beginning of operations in February 2014.
162 DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
DFS GIF – CANADIAN DIVIDEND – NORTHWEST (cont.)
Canadian Equity
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 18,098,252 12,133,669 Increase (Decrease) in Net Assets
from operations attributable to contract owners (100,276) 1,111,114
PremiumsSeries 5 3,807,969 4,309,489 Series 6* 897,640 243,293 Series 7* — 216,001
4,705,609 4,768,783
WithdrawalsSeries 5 (2,790,291) (1,510,327)Series 6* (135,898) (310)Series 7* — —
(2,926,189) (1,510,637)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 19,777,396 16,502,929
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners (100,276) 1,111,114
Adjustments for:Net realized gain (loss) (136,015) (61,468)Net unrealized gain (loss) 157,228 (1,088,248)
Proceeds from sale/ maturity of investments 1,071,963 411,912
Investments purchased (2,778,182) (3,660,614)Receivable for securities sold (1,133) —Accrued expenses 5,397 11,411 Payable for securities purchased 13,152 186,457
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES (1,767,866) (3,089,436)
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 4,703,320 4,575,042 Amounts paid on withdrawals (2,916,213) (1,488,385)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES 1,787,107 3,086,657
Increase (decrease) in cash/bank overdraft 19,241 (2,779)
Cash (bank overdraft), beginning of period 57,834 67,154
CASH (BANK OVERDRAFT), END OF PERIOD 77,075 64,375
The accompanying notes are an integral part of these financial statements.
163DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.0%)NEI Northwest Canadian Dividend Fund, Series I 1,160,721 17,810,888 19,772,076
TOTAL INVESTMENTS 17,810,888 19,772,076
OTHER NET ASSETS (0.0%) 5,320
NET ASSETS (100%) 19,777,396
The accompanying notes are an integral part of these financial statements.
TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
Toronto-Dominion Bank 8 .7%Royal Bank of Canada 7 .3%Scotiabank 7 .2%Rogers Communications 5 .9%Canadian Imperial Bank of Commerce 5 .3%Cenovus Energy 4 .2%Verizon Communications 3 .9%Kellogg Company 3 .9%Power Financial Corporation 3 .8%Eli Lilly and Company 3 .5%Baxter International 3 .4%Canadian Natural Resources 3 .4%Magna International 3 .4%Atea 3 .4%Symantec Corporation 3 .4%Manulife Financial Corporation 3 .1%Merck & Company 2 .9%Baxalta 2 .9%Potash Corporation of Saskatchewan 2 .8%Thomson Reuters Corporation 2 .4%Molson Coors Canada 2 .4%Intact Financial Corporation 2 .0%Parker Hannifin Corporation 2 .0%SNC-Lavalin Group 1 .7%Finning International 1 .7%
164 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveThe objective of this Fund is to achieve a balance between high dividend income and capital growth by investing mainly in a diversified portfolio of blue chip Canadian common stocks and, to a lesser extent, in high-yield preferred stocks and interest bearing securities .
Investment StrategyThe Fund invests in primarily blue-chip common stocks but may also invest in preferred stocks, bonds, purchase warrants and rights, royalty trusts and income trusts with preference given to capital growth while still providing a high regular level of income . Quality liquid corporations whose management has built shareholder value over time not to mention a proven ability to generate free cash flow, supporting growth and profitability as well as providing management with the ability to make strategic acquisitions, buy back stock and pay increasing dividends are preferred investments for this Fund . While equity securities including preferred stocks providing stable income are favoured, any small, mid and large capitalization Canadian corporations in a variety of industries meeting these criteria will be considered .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 19,772,076 — — 19,772,076 TOTAL 19,772,076 — — 19,772,076
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 18,087,070 — — 18,087,070 TOTAL 18,087,070 — — 18,087,070
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
DFS GIF – CANADIAN DIVIDEND – NORTHWEST (cont.)
Canadian Equity
165DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s best estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in the benchmark, with all other variables held constant, is as follows:
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmark % $ $S&P/TSX 3 .00 593,322 542,948
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
166 DFS GUARANTEED INVESTMENT FUNDS
® Fidelity True North is a registered trademark of FMR Corp .The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 39,399 12,324 Investments at fair value through profit
or loss (FVTPL) 29,203,159 26,593,557 Premiums receivable 203,324 54,850
29,445,882 26,660,731
LIABILITIESCurrent LiabilitiesAccrued expenses 78,044 68,980 Withdrawals payable 15,422 19,671 Payable for securities purchased 46,217 48,814
139,683 137,465
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 29,306,199 26,523,266
NET ASSETS PER UNITSeries 3 10.15 10 .05 Series 5 10.39 10 .26 Series 6 5.53 5 .45 Series 7 5.56 5 .47
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEInterest for attribution purposes — (501)Changes in fair value:
Net realized gain (loss) on investments 375,813 287,595 Net unrealized gain (loss) on investments 338,164 1,762,110
713,977 2,049,204
EXPENSESManagement fees and guarantee charge 367,484 287,863 Operating expenses 83,536 72,624
451,020 360,487
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 262,957 1,688,717
DATA PER SERIESSERIES 3Increase (Decrease) in Net Assets
from Operations 8,024 68,901 - per unit 0.07 0 .69
Average number of units 108,764 99,463
SERIES 5Increase (Decrease) in Net Assets
from Operations 276,622 1,603,543 - per unit 0.13 0 .71
Average number of units 2,193,521 2,247,116
SERIES 6*Increase (Decrease) in Net Assets
from Operations (15,373) 16,225 - per unit (0.02) 0 .35
Average number of units 665,203 46,758
SERIES 7*Increase (Decrease) in Net Assets
from Operations (6 316) 48 - per unit (0,11) 0,24
Average number of units 55 783 200
* Beginning of operations in February 2014.
DFS GIF – CANADIAN EQUITY – FIDELITY TRUE NORTH®
Canadian Equity
167DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.® Fidelity True North is a registered trademark of FMR Corp .
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 26,523,266 20,975,982 Increase (Decrease) in Net Assets
from operations attributable to contract owners 262,957 1,688,717
PremiumsSeries 3 290,642 169,984 Series 5 2,142,355 2,399,453 Series 6* 3,247,337 637,171 Series 7* 391,826 1,001
6,072,160 3,207,609
WithdrawalsSeries 3 (180,488) (219,840)Series 5 (2,681,542) (1,885,468)Series 6* (686,805) (28,844)Series 7* (3,349) —
(3,552,184) (2,134,152)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 29,306,199 23,738,156
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 262,957 1,688,717
Adjustments for:Net realized gain (loss) (375,813) (287,595)Net unrealized gain (loss) (338,164) (1,762,110)
Proceeds from sale/ maturity of investments 1,548,807 1,273,449
Investments purchased (3,444,432) (1,928,829)Receivable for securities sold — (21,369)Accrued expenses 9,064 8,389 Payable for securities purchased (2,597) (17,122)
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES (2,340,178) (1,046,470)
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 5,923,686 3,183,316 Amounts paid on withdrawals (3,556,433) (2,136,880)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES 2,367,253 1,046,436
Increase (decrease) in cash/bank overdraft 27,075 (34)
Cash (bank overdraft), beginning of period 12,324 (20,877)
CASH (BANK OVERDRAFT), END OF PERIOD 39,399 (20,911)
SUPPLEMENTAL INFORMATION ON CASH FLOWS FROM/USED IN OPERATING ACTIVITIESInterest paid — 501
The accompanying notes are an integral part of these financial statements.
168 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (99.6%)Fidelity True North ® Fund, Series O 623,668 22,613,765 29,203,159
TOTAL INVESTMENTS 22,613,765 29,203,159
OTHER NET ASSETS (0.4%) 103,040
NET ASSETS (100%) 29,306,199
The accompanying notes are an integral part of these financial statements.
TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
Toronto-Dominion Bank 7 .2%Loblaw Companies 4 .6%Valeant Pharmaceuticals International 4 .1%Manulife Financial Corporation 4 .0%Canadian National Railway Company 3 .1%Gildan Activewear 3 .0%Alimentation Couche-Tard 2 .9%Suncor Energy 2 .8%Enbridge 2 .7%Power Corporation of Canada 2 .7%Rogers Communications 2 .5%CGI Group 2 .5%Metro 2 .2%Royal Bank of Canada 2 .2%Catamaran Corporation 1 .8%Fairfax Financial Holdings 1 .6%Magna International 1 .6%SNC-Lavalin Group 1 .4%Empire Company 1 .4%Intact Financial Corporation 1 .3%Restaurant Brands International 1 .3%Open Text Corporation 1 .3%Bombardier 1 .3%Constellation Software 1 .3%Canadian Natural Resources 1 .2%
DFS GIF – CANADIAN EQUITY – FIDELITY TRUE NORTH® (cont.)
Canadian Equity
169DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo achieve strong long-term capital growth by investing primarily in equity securities of Canadian companies that have a history of strong capital growth over the long-term . The fundamental investment objective of this Fund is to achieve long-term capital appreciation while still emphasizing the preservation of capital by investing primarily in Canadian equity securities .
Investment StrategyTo invest primarily in small, medium and large Canadian companies . The Fund may also invest in a limited portion of foreign securities . The Fund may also use, to a lesser degree, derivatives such as options, futures, forward contracts and swaps to protect against losses caused by changes in stock prices or exchange rates .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 29,203,159 — — 29,203,159 TOTAL 29,203,159 — — 29,203,159
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 26,593,557 — — 26,593,557 TOTAL 26,593,557 — — 26,593,557
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
170 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in the benchmark, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmark, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmark % $ $S&P/TSX Capped 3 .00 504,358 490,871
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
DFS GIF – CANADIAN EQUITY – FIDELITY TRUE NORTH® (cont.)
Canadian Equity
171DFS GUARANTEED INVESTMENT FUNDS
DFS GIF – CANADIAN EQUITY – BISSETT
Canadian Equity
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 24,600 89,710 Investments at fair value through profit
or loss (FVTPL) 35,039,558 39,217,002 Premiums receivable 1,726 13,928 Receivable for securities sold 94,298 5,677
35,160,182 39,326,317
LIABILITIESCurrent LiabilitiesAccrued expenses 97,932 105,574 Withdrawals payable 31,454 16,882 Payable for securities purchased — 4,460
129,386 126,916
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 35,030,796 39,199,401
NET ASSETS PER UNITSeries 3 11.46 11 .80 Series 5 12.00 12 .31 Series 6 5.14 5 .27 Series 7 5.17 5 .29
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEDividends 162,428 —Changes in fair value:
Net realized gain (loss) on investments 1,403,052 564,321 Net unrealized gain (loss) on investments (1,921,087) 4,004,762
(355,607) 4,569,083
EXPENSESManagement fees and guarantee charge 509,776 514,155 Operating expenses 109,643 112,249
619,419 626,404
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS (975,026) 3,942,679
DATA PER SERIESSERIES 3Increase (Decrease) in Net Assets
from Operations (512,746) 2,194,280 - per unit (0.32) 1 .18
Average number of units 1,624,279 1,863,790
SERIES 5Increase (Decrease) in Net Assets
from Operations (385,508) 1,720,199 - per unit (0.30) 1 .28
Average number of units 1,292,323 1,347,303
SERIES 6*Increase (Decrease) in Net Assets
from Operations (76,296) 28,122 - per unit (0.17) 0 .42
Average number of units 455,579 67,663
SERIES 7*Increase (Decrease) in Net Assets
from Operations (476) 78 - per unit (0.13) 0 .39
Average number of units 3,805 200
* Beginning of operations in February 2014.
172 DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
DFS GIF – CANADIAN EQUITY – BISSETT (cont.)
Canadian Equity
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 39,199,401 34,917,839 Increase (Decrease) in Net Assets
from operations attributable to contract owners (975,026) 3,942,679
PremiumsSeries 3 479,443 756,174 Series 5 804,108 2,875,048 Series 6* 697,892 716,731 Series 7* 650 1,001
1,982,093 4,348,954
WithdrawalsSeries 3 (2,282,543) (2,243,614)Series 5 (2,375,483) (1,010,746)Series 6* (517,643) (9,231)Series 7* (3) —
(5,175,672) (3,263,591)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 35,030,796 39,945,881
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners (975,026) 3,942,679
Adjustments for:Net realized gain (loss) (1,403,052) (564,321)Net unrealized gain (loss) 1,921,087 (4,004,762)
Proceeds from sale/ maturity of investments 4,475,422 1,636,356
Investments purchased (816,013) (2,122,668)Receivable for securities sold (88,621) (133,618)Accrued expenses (7,642) 14,819 Payable for securities purchased (4,460) (11,583)
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES 3,101,695 (1,243,098)
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 1,994,295 4,355,285 Amounts paid on withdrawals (5,161,100) (3,121,579)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES (3,166,805) 1,233,706
Increase (decrease) in cash/bank overdraft (65,110) (9,392)
Cash (bank overdraft), beginning of period 89,710 89,963
CASH (BANK OVERDRAFT), END OF PERIOD 24,600 80,571
The accompanying notes are an integral part of these financial statements.
173DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.0%)Franklin Bissett Canadian Equity Fund, Series O 265,592 24,195,987 35,039,558
TOTAL INVESTMENTS 24,195,987 35,039,558
OTHER NET ASSETS (-0.0%) (8,762)
NET ASSETS (100%) 35,030,796
The accompanying notes are an integral part of these financial statements.
TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
Brookfield Asset Management 5 .8%Canadian National Railway Company 4 .8%Toronto-Dominion Bank 4 .7%Canadian Imperial Bank of Commerce 4 .5%Royal Bank of Canada 4 .4%Scotiabank 4 .0%Bank of Montreal 3 .9%Enbridge 3 .9%Restaurant Brands International 3 .6%MacDonald, Dettwiler and Associates Ltd 2 .9%Canadian Pacific Railway 2 .9%Onex Corporation 2 .7%Power Corporation of Canada 2 .6%Thomson Reuters Corporation 2 .6%Power Financial Corporation 2 .5%Alimentation Couche-Tard 2 .5%Metro 2 .3%Saputo Group 2 .1%Home Capital Group Inc . 2 .0%Agrium 1 .9%TransCanada Corporation 1 .9%Keyera Corporation 1 .7%Canadian Natural Resources 1 .5%Atco Ltd 1 .5%Toromont Industries Ltd 1 .4%
174 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveThe fundamental investment objective of this Fund is to achieve long-term capital appreciation while continuing to emphasize the preservation of capital by investing primarily in Canadian equity securities .
Investment StrategyTo invest primarily in mid to large cap Canadian equity securities of growth-oriented companies . The Fund may also have a foreign equity component .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 35,039,558 — — 35,039,558 TOTAL 35,039,558 — — 35,039,558
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 39,217,002 — — 39,217,002 TOTAL 39,217,002 — — 39,217,002
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Transfers between Levels 1 and 2Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
DFS GIF – CANADIAN EQUITY – BISSETT (cont.)
Canadian Equity
175DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in the benchmark, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmark, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmark % $ $S&P/TSX 3 .00 885,641 870,636
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
176 DFS GUARANTEED INVESTMENT FUNDS
DFS GIF – CANADIAN EQUITY – FIERA
Canadian Equity
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 35,434 53,946 Investments at fair value through profit
or loss (FVTPL) 32,360,007 33,090,960 Investments at fair value through profit
or loss (FVTPL) pledged as collateral 7,466,734 8,689,071 Premiums receivable 5,698 9,845 Cash guarantee received for repurchase
transactions 1,875,741 —Interest, dividends and other receivables 53,542 46,007
41,797,156 41,889,829
LIABILITIESCurrent LiabilitiesAccrued expenses 110,090 110,823 Withdrawals payable 89,600 47,237 Commitments related to repurchase
transactions 1,875,741 —2,075,431 158,060
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 39,721,725 41,731,769
NET ASSETS PER UNITSeries 1 11.04 10 .71 Series 3 12.16 11 .76 Series 5 12.80 12 .34 Series 6 5.54 5 .34 Series 7 5.58 5 .37 Series IGP 10.40 10 .01
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEInterest for attribution purposes 9,027 8,552 Dividends 461,708 393,672 Revenue from securities lending and
repurchase transactions 3,464 2,620 Changes in fair value:
Net realized gain (loss) on investments 1,972,362 1,850,978 Net unrealized gain (loss) on investments (294,128) 2,979,374
2,152,433 5,235,196 EXPENSESManagement fees and guarantee charge 531,226 501,760 Operating expenses 144,055 144,514
675,281 646,274 Commissions and other portfolio
transaction costs 37,895 49,991 713,176 696,265
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 1,439,257 4,538,931 DATA PER SERIESSERIES1Increase (Decrease) in Net Assets
from Operations 512,933 1,995,981 - per unit 0.35 1 .18
Average number of units 1,465,251 1,690,372 SERIES 3Increase (Decrease) in Net Assets
from Operations 511,177 1,858,530 - per unit 0.42 1 .33
Average number of units 1,219,426 1,394,589 SERIES 5Increase (Decrease) in Net Assets
from Operations 203,064 677,575 - per unit 0.47 1 .42
Average number of units 435,696 475,548 SERIES 6*Increase (Decrease) in Net Assets
from Operations 12,433 6,761 - per unit 0.17 0 .53
Average number of units 72,709 12,644 SERIES 7*Increase (Decrease) in Net Assets
from Operations 1,852 84 - per unit 0.22 0 .42
Average number of units 8,557 200 SERIES IGP**Increase (Decrease) in Net Assets
from Operations 197,798 —- per unit 0.47 —
Average number of units 424,091 —
The accompanying notes are an integral part of these financial statements.* Beginning of operations in February 2014.
** Beginning of operations in November 2014.
177DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.** Beginning of operations in November 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 41,731,769 38,037,971 Increase (Decrease) in Net Assets
from operations attributable to contract owners 1,439,257 4,538,931
PremiumsSeries 1 215,917 112,045 Series 3 298,793 284,428 Series 5 273,473 250,792 Series 6* 234,475 122,137 Series 7* — 1,001 Series IGP** 9,857 —
1,032,515 770,403
WithdrawalsSeries 1 (1,353,554) (1,506,702)Series 3 (1,481,816) (1,416,665)Series 5 (553,863) (544,391)Series 6* (35,216) (451)Series 7* (2,028) —Series IGP** (1,055,339) —
(4,481,816) (3,468,209)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 39,721,725 39,879,096
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 1,439,257 4,538,931
Adjustments for:Net realized gain (loss) (1,972,362) (1,850,978)Net unrealized gain (loss) 294,128 (2,979,374)
Proceeds from sale/ maturity of investments 33,277,335 29,062,363
Investments purchased (29,646,531) (26,661,900)Cash guarantee received for
repurchase transactions (1,875,741) —Interest, dividends and other
receivables (7,535) (28,009)Accrued expenses (733) 4,842 Commitments related to repurchase
transactions 1,875,741 —Payable for securities purchased — 613,140
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES 3,383,559 2,699,015
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 1,036,662 768,293 Amounts paid on withdrawals (4,439,453) (3,407,827)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES (3,402,791) (2,639,534)
Effect of exchange rate changes on foreign cash 720 (346)
Increase (decrease) in cash/bank overdraft (18,512) 59,135
Cash (bank overdraft), beginning of period 53,946 (11,648)
CASH (BANK OVERDRAFT), END OF PERIOD 35,434 47,487
SUPPLEMENTAL INFORMATION ON CASH FLOWS FROM/USED IN OPERATING ACTIVITIESInterest received 7,202 4,354 Dividends received, net of
withholding taxes 454,055 365,909 Interest paid 2 —
The accompanying notes are an integral part of these financial statements.
178 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015
Number Fair of Shares Cost Value $ $
CANADIAN EQUITIES (98.5%)
Energy (18.1%)Canadian Natural Resources 36,295 1,343,897 1,230,763 Cenovus Energy 40,752 893,363 813,817 Enbridge 19,900 1,114,935 1,162,359 Freehold Royalties 41,100 739,800 663,354 Peyto Exploration & Development Corporation 15,189 459,345 463,720 PrairieSky Royalty 13,989 424,954 440,793 Suncor Energy 33,444 1,211,139 1,150,474 Tourmaline Oil Corp . 13,178 556,180 494,439 TransCanada Corporation 15,100 870,542 766,476
7,614,155 7,186,195
Materials (12.9%)Agnico Eagle Mines 18,997 646,199 673,634 Agrium 3,300 420,911 436,821 CCL Industries, Class B 4,814 369,896 737,505 First Quantum Minerals 42,475 661,562 693,617 Franco-Nevada Corporation* 8,277 453,278 493,061 Potash Corporation of Saskatchewan* 7,200 273,334 278,496 Tahoe Resources 81,396 1,367,453 1,232,335 West Fraser Timber Co . 8,116 419,455 557,001
4,612,088 5,102,470
Industrials (8.1%)ATS Automation Tooling Systems* 66,650 842,855 1,019,078 Canadian National Railway Company 19,122 958,800 1,377,931 Canadian Pacific Railway* 4,133 608,649 826,683
2,410,304 3,223,692
Consumer Discretionary (5.5%)Dollarama 12,133 487,646 918,468 Gildan Activewear* 30,386 748,392 1,260,715
1,236,038 2,179,183
Consumer Staples (7.3%)Alimentation Couche-Tard, Class B 15,932 601,180 851,247 Loblaw Companies 32,481 1,605,971 2,048,901
2,207,151 2,900,148
Health Care (4.7%)Valeant Pharmaceuticals International 6,782 1,674,990 1,879,089
* Securities pledged as collateral, in part or in whole, through the securities lending program.
DFS GIF – CANADIAN EQUITY – FIERA (cont.)
Canadian Equity
179DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015
Number Fair of Shares Cost Value $ $
CANADIAN EQUITIES (cont.)
Financials (37.8%)CI Financial 33,467 1,056,129 1,124,491 Element Financial Corporation 32,109 410,748 634,153 Element Financial Corporation, Subscription Receipts 68,335 1,161,695 1,338,683 Intact Financial Corporation 7,299 541,412 633,480 Manulife Financial Corporation 85,254 1,856,338 1,978,745 Power Financial Corporation* 19,384 624,313 695,304 RioCan Real Estate Investment Trust* 18,100 540,351 484,537 Royal Bank of Canada 41,421 2,791,422 3,163,736 Scotiabank 37,597 2,328,454 2,423,879 Toronto-Dominion Bank 47,589 2,433,975 2,524,121
13,744,837 15,001,129
Information Technology (2.7%)CGI Group, Class A* 22,309 696,668 1,089,795
Telecommunication Services (1.4%)TELUS Corporation 12,688 525,732 545,965
TOTAL CANADIAN EQUITIES 34,721,963 39,107,666
Par Value
MONEY MARKET SECURITIES (1.8%)
Canada Treasury Bills* 2015-09-10 CAD 720,000 719,075 719,075
PORTFOLIO TRANSACTION COSTS INCLUDED IN THE SECURITIES’ COST (14,863) —
TOTAL INVESTMENTS (100.3%) 35,426,175 39,826,741
OTHER NET ASSETS (-0.3%) (105,016)
NET ASSETS (100%) 39,721,725
* Securities pledged as collateral, in part or in whole, through the securities lending program.The accompanying notes are an integral part of these financial statements.
180 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo provide investors with long-term capital growth by investing primarily in Canadian equity securities .
Investment StrategyTo invest primarily in the common shares of medium and large cap Canadian securities of growth-oriented companies .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLEquities 39,107,666 — — 39,107,666 Money Market Securities 719,075 — — 719,075 TOTAL 39,826,741 — — 39,826,741
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLEquities 41,115,942 — — 41,115,942 Money Market Securities 664,089 — — 664,089 TOTAL 41,780,031 — — 41,780,031
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Fund’s financial assets and liabilities are denominated in Canadian dollars . As a result, the Fund is not significantly exposed to currency risk .
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Fund’s financial assets and liabilities are non-interest bearing . As a result, the Fund is not subject to significant amounts of risk arising from fluctuations in the prevailing levels of market interest rates .
DFS GIF – CANADIAN EQUITY – FIERA (cont.)
Canadian Equity
181DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Concentration RiskThe following table summarizes the concentration risk, as in percentages of the Net Assets Attributable to Contract Owners:
June 30, 2015MARKET SEGMENT %Equities
Financials 37 .8 Energy 18 .1 Materials 12 .9 Industrials 8 .1 Consumer Staples 7 .3 Consumer Discretionary 5 .5 Health Care 4 .7 Information Technology 2 .7 Telecommunication Services 1 .4
Money Market Securities 1 .8 Other Net Assets (0 .3)TOTAL 100
Price RiskThe Fund may trade in financial instruments and take positions in traded and over-the-counter instruments .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in the benchmark, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmark, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmark % $ $S&P/TSX Capped 3 .00 1,082,517 1,258,028
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
December 31, 2014MARKET SEGMENT %Equities
Financials 34 .0Energy 18 .8Materials 10 .3Industrials 9 .5Consumer Discretionary 8 .6Consumer Staples 7 .4Information Technology 4 .9Telecommunication Services 3 .6Health Care 1 .4
Money Market Securities 1 .6Other Net Assets (0 .1)TOTAL 100
182 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Credit RiskAs at June 30, 2015 and December 31, 2014, the Fund had no significant investments in either fixed-income securities, money market securities and derivative financial instruments . As a result, the Fund is not significantly exposed to credit risk .
Securities Lending and Repurchase TransactionsAs part of its securities lending and repurchase transactions, the Fund is exposed to counterparty credit risk . The carrying amount of financial assets pledged as collateral for liabilities is:
$June 30, 2015 1,837,792 December 31, 2014 —
The fair value of the financial assets held as collateral that the fund is permitted to sell or repledge in the absence of default totalled:
$June 30, 2015 1,229,048 December 31, 2014 —
Liquidity Risk
For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
DERECOGNITION OF FINANCIAL ASSETS
Securities lending and repurchase transactionsAs part of transactions involving securities lending or repurchase transactions, the Fund transfers financial assets under terms and conditions providing for their future repurchase . These financial assets remain recognized in the “Investments at fair value through profit or loss pledged as collateral” of the Statement of Financial Position as the Fund retains substantially all the risks and rewards related to these assets .
June 30, 2015 December 31, 2014$ $
Investments at FVTPL pledged as Collateral 7,466,734 8,689,071 Value of Collateral Securities 7,616,817 8,862,855
The Funds require collateral in the form of cash or such other securities as may be acceptable to Desjardins Financial Security and that have an aggregate value of no less than 102% of the loaned securities fair value .
The following table presents the carrying amount and the fair value of financial assets transferred by the Fund but not derecognized as well as the related liabilities recognized in “Commitments related to repurchase transactions” and “Commitments related to securities lending” of the Statement of Financial Position .
Fair Value*June 30, 2015 December 31, 2014
$ $Financial Assets 1,837,792 — Related Liabilities 1,875,339 —
* The fair value equals carrying amount .
DFS GIF – CANADIAN EQUITY – FIERA (cont.)
Canadian Equity
183DFS GUARANTEED INVESTMENT FUNDS
DFS GIF – CANADIAN EQUITY – JARISLOWSKY FRASER
Canadian Equity
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsInvestments at fair value through profit
or loss (FVTPL) 169,835,740 188,650,197 Premiums receivable 11,468 2,364 Receivable for securities sold 226,644 89,196
170,073,852 188,741,757
LIABILITIESCurrent LiabilitiesBank overdraft 328,916 150,757 Accrued expenses 423,442 450,052 Withdrawals payable 380,421 63,885
1,132,779 664,694
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 168,941,073 188,077,063
NET ASSETS PER UNITSeries 3 6.67 6 .89 Series 5 7.01 7 .22
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEInterest for attribution purposes 21,965 —Dividends 2,337,529 2,434,436 Changes in fair value:
Net realized gain (loss) on investments 1,541,134 1,233,385 Net unrealized gain (loss) on investments (6,337,656) 13,280,585
(2,437,028) 16,948,406
EXPENSESManagement fees and guarantee charge 1,946,105 2,006,905 Operating expenses 718,654 738,784
2,664,759 2,745,689
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS (5,101,787) 14,202,717
DATA PER SERIESSERIES 3Increase (Decrease) in Net Assets
from Operations (168,579) 477,600 - per unit (0.20) 0 .47
Average number of units 823,806 1,011,335
SERIES 5Increase (Decrease) in Net Assets
from Operations (4,933,208) 13,725,117 - per unit (0.20) 0 .52
Average number of units 24,253,351 26,599,949
184 DFS GUARANTEED INVESTMENT FUNDS
The accompanying notes are an integral part of these financial statements.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 188,077,063 185,263,477 Increase (Decrease) in Net Assets
from operations attributable to contract owners (5,101,787) 14,202,717
PremiumsSeries 3 95,257 139,147 Series 5 1,577,220 2,253,660
1,672,477 2,392,807
WithdrawalsSeries 3 (783,070) (641,062)Series 5 (14,923,610) (9,579,528)
(15,706,680) (10,220,590)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 168,941,073 191,638,411
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners (5,101,787) 14,202,717
Adjustments for:Net realized gain (loss) (1,541,134) (1,233,385)Net unrealized gain (loss) 6,337,656 (13,280,585)
Proceeds from sale/ maturity of investments 32,778,617 9,364,174
Investments purchased (18,760,682) (1,885,060)Receivable for securities sold (137,448) 30,336 Accrued expenses (26,610) 22,083
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES 13,548,612 7,220,280
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 1,663,373 2,521,163 Amounts paid on withdrawals (15,390,144) (9,752,668)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES (13,726,771) (7,231,505)
Increase (decrease) in cash/bank overdraft (178,159) (11,225)
Cash (bank overdraft), beginning of period (150,757) (185,322)
CASH (BANK OVERDRAFT), END OF PERIOD (328,916) (196,547)
SUPPLEMENTAL INFORMATION ON CASH FLOWS FROM/USED IN OPERATING ACTIVITIESInterest paid 562 —
DFS GIF – CANADIAN EQUITY – JARISLOWSKY FRASER (cont.)
Canadian Equity
185DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.5%)Jarislowsky Fraser Canadian Equity Fund 5,226,664 159,916,817 169,835,740
TOTAL INVESTMENTS 159,916,817 169,835,740
OTHER NET ASSETS (-0.5%) (894,667)
NET ASSETS (100%) 168,941,073
The accompanying notes are an integral part of these financial statements.
TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
Toronto-Dominion Bank 7 .9%Jarislowsky Fraser Special Equity Fund 7 .6%Royal Bank of Canada 6 .7%Scotiabank 6 .3%Suncor Energy 4 .3%Canadian National Railway Company 4 .2%Enbridge 4 .1%Manulife Financial Corporation 4 .1%Metro 3 .8%Canadian Natural Resources 3 .7%Loblaw Companies 3 .4%Thomson Reuters Corporation 3 .4%Cenovus Energy 2 .8%Canadian Tire Corporation 2 .8%SNC-Lavalin Group 2 .6%Open Text Corporation 2 .4%Intact Financial Corporation 2 .4%Great-West Lifeco 2 .3%Cameco Corporation 1 .8%Industrial Alliance, Insurance and Financial Services 1 .7%Gildan Activewear 1 .7%CGI Group 1 .6%Vermilion Energy 1 .6%Stantec 1 .6%Pembina Pipeline Corporation 1 .6%
186 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo achieve long-term capital appreciation while continuing to emphasize the preservation of capital by investing primarily in large cap Canadian equity securities .
Investment StrategyTo invest primarily in Canadian equity securities in areas of the Canadian economy where superior rates of growth are expected .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds — 169,835,740 — 169,835,740 TOTAL — 169,835,740 — 169,835,740
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds — 188,650,197 — 188,650,197 TOTAL — 188,650,197 — 188,650,197
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
DFS GIF – CANADIAN EQUITY – JARISLOWSKY FRASER (cont.)
Canadian Equity
187DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in the benchmark, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmark, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmark % $ $S&P/TSX 3 .00 3,532,715 3,776,676
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
188 DFS GUARANTEED INVESTMENT FUNDS
DFS GIF – SPECIALTY EQUITY – NORTHWEST
Canadian Equity
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 40,689 20,664 Investments at fair value through profit
or loss (FVTPL) 18,249,828 20,083,464 Premiums receivable 5,849 18,019 Receivable for securities sold 17,943 17,461
18,314,309 20,139,608
LIABILITIESCurrent LiabilitiesAccrued expenses 52,431 55,657 Withdrawals payable 24,596 18,499 Payable for securities purchased 20,070 18,093
97,097 92,249
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 18,217,212 20,047,359
NET ASSETS PER UNITSeries 3 6.24 6 .21 Series 5 6.56 6 .51 Series 6 4.67 4 .63 Series 7 4.69 4 .64
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEChanges in fair value:
Net realized gain (loss) on investments 147,623 365,108 Net unrealized gain (loss) on investments 301,641 2,430,103
449,264 2,795,211
EXPENSESManagement fees and guarantee charge 283,919 340,595 Operating expenses 38,594 46,997
322,513 387,592
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 126,751 2,407,619
DATA PER SERIESSERIES 3Increase (Decrease) in Net Assets
from Operations 20,542 546,867 - per unit 0.03 0 .70
Average number of units 663,660 777,438
SERIES 5Increase (Decrease) in Net Assets
from Operations 102,455 1,855,822 - per unit 0.05 0 .75
Average number of units 2,154,400 2,475,067
SERIES 6*Increase (Decrease) in Net Assets
from Operations 3,564 4,864 - per unit 0.02 0 .42
Average number of units 156,538 11,613
SERIES 7*Increase (Decrease) in Net Assets
from Operations 190 66 - per unit 0.05 0 .33
Average number of units 4,054 200
* Beginning of operations in February 2014.
189DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 20,047,359 22,109,155 Increase (Decrease) in Net Assets
from operations attributable to contract owners 126,751 2,407,619
PremiumsSeries 3 70,891 100,343 Series 5 1,389,004 1,254,203 Series 6* 443,929 130,698 Series 7* — 1,001
1,903,824 1,486,245
WithdrawalsSeries 3 (578,335) (493,340)Series 5 (3,120,939) (1,908,702)Series 6* (161,448) (149)Series 7* — —
(3,860,722) (2,402,191)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 18,217,212 23,600,828
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 126,751 2,407,619
Adjustments for:Net realized gain (loss) (147,623) (365,108)Net unrealized gain (loss) (301,641) (2,430,103)
Proceeds from sale/ maturity of investments 2,602,672 1,956,493
Investments purchased (319,772) (661,972)Receivable for securities sold (482) (37,775)Accrued expenses (3,226) 4,470 Payable for securities purchased 1,977 (32,638)
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES 1,958,656 840,986
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 1,915,994 1,501,543 Amounts paid on withdrawals (3,854,625) (2,358,810)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES (1,938,631) (857,267)
Increase (decrease) in cash/bank overdraft 20,025 (16,281)
Cash (bank overdraft), beginning of period 20,664 29,743
CASH (BANK OVERDRAFT), END OF PERIOD 40,689 13,462
The accompanying notes are an integral part of these financial statements.
190 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.2%)NEI Northwest Specialty Equity Fund, Series I 1,018,991 17,032,160 18,249,828
TOTAL INVESTMENTS 17,032,160 18,249,828
OTHER NET ASSETS (-0.2%) (32,616)
NET ASSETS (100%) 18,217,212
The accompanying notes are an integral part of these financial statements.
TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
Home Capital Group Inc . 6 .3%Western Forest Products 3 .9%Gluskin Sheff & Associates 3 .6%Descartes Systems Group 3 .6%Alaris Royalty Corporation 3 .5%Parex Resources 3 .2%Performance Sports Group 3 .2%Industrial Alliance, Insurance and Financial Services 3 .0%Premium Brands Holdings Corporation 3 .0%Black Diamond Inc . 2 .9%Fortuna Silver Mines 2 .8%High Liner Foods 2 .8%Osisko Gold Royalties 2 .7%Callidus Capital Corporation 2 .6%Winpak Ltd 2 .6%Primero Mining Corporation 2 .4%Lassonde Industries Inc . 2 .4%Stella-Jones 2 .3%Metro 2 .3%Cogeco Cable 2 .3%Boyd Group Income Fund 2 .2%Advantage Oil & Gas 2 .2%Major Drilling Group International 2 .1%TransGlobe Energy Corporation 2 .0%Canadian Energy Services & Technology Corporation 1 .9%
DFS GIF – SPECIALTY EQUITY – NORTHWEST (cont.)
Canadian Equity
191DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo achieve capital appreciation over the longer term by investing primarily in the equity of smaller, fast growing Canadian companies with small market capitalizations under a billion dollars .
Investment StrategyTo invest primarily in common shares and other equity securities issued by companies that are financially strong and have distinct competitive advantages at relative valuations .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 18,249,828 — — 18,249,828 TOTAL 18,249,828 — — 18,249,828
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 20,083,464 — — 20,083,464 TOTAL 20,083,464 — — 20,083,464
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
192 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in benchmarks, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmarks, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmarks % $ $S&P/TSX Small Cap (60%) 3 .00 281,782 299,241S&P/TSX Completion (40%) 3 .00 187,855 199,494
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
DFS GIF – SPECIALTY EQUITY – NORTHWEST (cont.)
Canadian Equity
193DFS GUARANTEED INVESTMENT FUNDS
DFS GIF – SMALL CAP – BISSETT
Canadian Equity
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsInvestments at fair value through profit
or loss (FVTPL) 21,700,178 25,319,150 Premiums receivable 16,948 5,199 Receivable for securities sold 45,643 25,956
21,762,769 25,350,305
LIABILITIESCurrent LiabilitiesBank overdraft 11,989 3,863 Accrued expenses 62,171 70,384 Withdrawals payable 45,355 32,042 Payable for securities purchased — 13,860
119,515 120,149
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 21,643,254 25,230,156
NET ASSETS PER UNITSeries 3 16.56 17 .05 Series 5 17.37 17 .83 Series 6 4.60 4 .73 Series 7 4.63 4 .74
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEInterest for attribution purposes — (56)Changes in fair value:
Net realized gain (loss) on investments 442,984 329,592 Net unrealized gain (loss) on investments (721,182) 2,212,645
(278,198) 2,542,181
EXPENSESManagement fees and guarantee charge 335,039 409,729 Operating expenses 52,513 66,302
387,552 476,031
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS (665,750) 2,066,150
DATA PER SERIESSERIES 3Increase (Decrease) in Net Assets
from Operations (280,582) 917,467 - per unit (0.50) 1 .35
Average number of units 565,953 681,813
SERIES 5Increase (Decrease) in Net Assets
from Operations (344,156) 1,143,116 - per unit (0.52) 1 .50
Average number of units 663,176 760,204
SERIES 6*Increase (Decrease) in Net Assets
from Operations (40,718) 5,490 - per unit (0.11) 0 .14
Average number of units 363,008 39,104
SERIES 7*Increase (Decrease) in Net Assets
from Operations (294) 77 - per unit (0.01) 0 .38
Average number of units 22,640 200
* Beginning of operations in February 2014.
194 DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 25,230,156 25,768,597 Increase (Decrease) in Net Assets
from operations attributable to contract owners (665,750) 2,066,150
PremiumsSeries 3 114,665 454,663 Series 5 689,574 3,173,331 Series 6* 637,436 459,295 Series 7* 650 101,001
1,442,325 4,188,290
WithdrawalsSeries 3 (1,394,414) (1,417,630)Series 5 (2,488,821) (1,155,838)Series 6* (391,880) (8,168)Series 7* (88,362) —
(4,363,477) (2,581,636)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 21,643,254 29,441,401
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners (665,750) 2,066,150
Adjustments for:Net realized gain (loss) (442,984) (329,592)Net unrealized gain (loss) 721,182 (2,212,645)
Proceeds from sale/ maturity of investments 3,783,405 1,302,369
Investments purchased (442,631) (2,345,340)Receivable for securities sold (19,687) (6,413)Accrued expenses (8,213) 12,210 Payable for securities purchased (13,860) (2,202)
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES 2,911,462 (1,515,463)
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 1,430,576 4,079,084 Amounts paid on withdrawals (4,350,164) (2,557,660)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES (2,919,588) 1,521,424
Increase (decrease) in cash/bank overdraft (8,126) 5,961
Cash (bank overdraft), beginning of period (3,863) (8,425)
CASH (BANK OVERDRAFT), END OF PERIOD (11,989) (2,464)
SUPPLEMENTAL INFORMATION ON CASH FLOWS FROM/USED IN OPERATING ACTIVITIESInterest paid — 56
The accompanying notes are an integral part of these financial statements.
DFS GIF – SMALL CAP – BISSETT (cont.)
Canadian Equity
195DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015
Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.3%)Franklin Bissett Small Cap Fund, Series O 264,217 19,265,178 21,700,178
TOTAL INVESTMENTS 19,265,178 21,700,178
OTHER NET ASSETS (-0.3%) (56,924)
NET ASSETS (100%) 21,643,254
The accompanying notes are an integral part of these financial statements.
TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
Equitable Group 6 .0%Canam Group 5 .5%Leon’s Furniture Ltd 4 .7%Richelieu Hardware Ltd 4 .6%RONA 4 .1%Transat A .T . Inc . 3 .9%Advantage Oil & Gas 3 .7%Transcontinental 3 .6%Indigo Books & Music Inc . 3 .6%Reitmans (Canada) Ltd 3 .0%Xtreme Drilling and Coil Services Corporation 2 .8%Winpak Ltd 2 .8%Horizon North Logistics Inc . 2 .8%Trican Well Service Ltd 2 .7%Westaim Corporation, Warrants, February 20, 2049 2 .7%ZCL Composites Inc . 2 .3%NuVista Energy Ltd 2 .3%Trinidad Drilling 2 .0%Major Drilling Group International 2 .0%CanElson Drilling 1 .9%Delphi Energy Corporation 1 .7%AGF Management Ltd 1 .6%Granite Real Estate Inc . 1 .5%Home Capital Group Inc . 1 .5%Storm Resources Ltd 1 .5%
196 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo provide investors with long-term capital appreciation . The Fund invests mainly in shares of Canadian companies with small to medium market capitalizations which are expected to provide above-average returns .
Investment StrategyTo be fully diversified at all times to compensate for the volatility inherent in investing in small capitalization equities .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 21,700,178 — — 21,700,178 TOTAL 21,700,178 — — 21,700,178
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 25,319,150 — — 25,319,150 TOTAL 25,319,150 — — 25,319,150
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
DFS GIF – SMALL CAP – BISSETT (cont.)
Canadian Equity
197DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in the benchmark, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmark, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmark % $ $S&P/TSX Small Cap 3 .00 424,892 459,043
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
198 DFS GUARANTEED INVESTMENT FUNDS
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 30,619 5,768 Investments at fair value through profit
or loss (FVTPL) 16,684,659 13,324,614 Premiums receivable 56,355 14,155 Receivable for securities sold 3,801 —
16,775,434 13,344,537
LIABILITIESCurrent LiabilitiesAccrued expenses 43,222 34,467 Withdrawals payable 20,584 4,128 Payable for securities purchased 44,043 11,627
107,849 50,222
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 16,667,585 13,294,315
NET ASSETS PER UNITSeries 3 6.30 5 .85 Series 5 6.66 6 .16 Series 6 6.11 5 .64 Series 7 6.13 5 .65
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEInterest for attribution purposes 79 15 Dividends 138,307 93,940 Changes in fair value:
Net realized gain (loss) on investments 224,914 111,971 Net unrealized gain (loss) on investments 967,479 326,651
1,330,779 532,577
EXPENSESManagement fees and guarantee charge 201,416 142,363 Operating expenses 44,836 32,673
246,252 175,036 Withholding taxes 20,095 11,723
266,347 186,759
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 1,064,432 345,818
DATA PER SERIESSERIES 3Increase (Decrease) in Net Assets
from Operations 339,626 131,346 - per unit 0.46 0 .16
Average number of units 740,898 803,004
SERIES 5Increase (Decrease) in Net Assets
from Operations 632,067 212,632 - per unit 0.45 0 .17
Average number of units 1,396,462 1,227,141
SERIES 6*Increase (Decrease) in Net Assets
from Operations 87,710 1,844 - per unit 0.29 0 .04
Average number of units 303,089 49,012
SERIES 7*Increase (Decrease) in Net Assets
from Operations 5,029 (4)- per unit 0.26 (0 .02)
Average number of units 19,414 200
* Beginning of operations in February 2014.
DFS GIF – AMERICAN EQUITY – MFS
Foreign Equity
199DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 13,294,315 9,806,704 Increase (Decrease) in Net Assets
from operations attributable to contract owners 1,064,432 345,818
PremiumsSeries 3 228,574 253,911 Series 5 2,084,460 1,469,363 Series 6* 1,536,665 526,020 Series 7* 109,281 1,001
3,958,980 2,250,295
WithdrawalsSeries 3 (682,111) (410,516)Series 5 (868,518) (497,298)Series 6* (99,513) (1,749)Series 7* — —
(1,650,142) (909,563)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 16,667,585 11,493,254
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in Net Assets
from operations attributable to contract owners 1,064,432 345,818
Adjustments for:Net realized gain (loss) (224,914) (111,971)Net unrealized gain (loss) (967,479) (326,651)
Proceeds from sale/ maturity of investments 1,816,874 860,921
Investments purchased (3,984,526) (2,121,050)Receivable for securities sold (3,801) (12,273)Accrued expenses 8,755 5,342 Payable for securities purchased 32,416 (4,919)
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES (2,258,243) (1,364,783)
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 3,916,780 2,256,510 Amounts paid on withdrawals (1,633,686) (892,978)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES 2,283,094 1,363,532
Increase (decrease) in cash/bank overdraft 24,851 (1,251)
Cash (bank overdraft), beginning of period 5,768 770
CASH (BANK OVERDRAFT), END OF PERIOD 30,619 (481)
The accompanying notes are an integral part of these financial statements.
200 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.1%)MFS U .S . Equity Core Fund 1,013,128 12,406,983 16,684,659
TOTAL INVESTMENTS 12,406,983 16,684,659
OTHER NET ASSETS (-0.1%) (17,074)
NET ASSETS (100%) 16,667,585
The accompanying notes are an integral part of these financial statements.
TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
JPMorgan Chase & Company 3 .3%Visa 2 .7%Danaher Corporation 2 .6%Walt Disney Company 2 .1%Wells Fargo & Company 2 .1%Goldman Sachs Group 2 .0%Johnson & Johnson 2 .0%American Express Company 2 .0%EMC Corporation 2 .0%United Technologies Corporation 2 .0%Comcast Corporation 1 .9%Thermo Fisher Scientific 1 .9%Bank of America Corporation 1 .9%Time Warner Cable 1 .8%American Tower Corporation 1 .8%Cognizant Technology Solutions Corporation 1 .8%Valeant Pharmaceuticals International 1 .8%Honeywell International 1 .7%Accenture 1 .7%Mastercard Inc . 1 .7%Google 1 .6%Fidelity National Information Services Inc . 1 .6%EOG Resources 1 .6%BlackRock Inc . 1 .6%Newell Rubbermaid 1 .6%
DFS GIF – AMERICAN EQUITY – MFS (cont.)
Foreign Equity
201DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo outperform the S&P 500 .
Investment StrategyTo invest mainly in large cap equity securities of corporations located in the United States .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds — 16,684,659 — 16,684,659 TOTAL — 16,684,659 — 16,684,659
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds — 13,324,614 — 13,324,614 TOTAL — 13,324,614 — 13,324,614
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks . Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification . Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
202 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in the benchmark, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmark, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmark % $ $S&P 500 3 .00 489,380 407,780
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
DFS GIF – AMERICAN EQUITY – MFS (cont.)
Foreign Equity
203DFS GUARANTEED INVESTMENT FUNDS
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 58,474 79,584 Investments at fair value through profit
or loss (FVTPL) 19,527,768 14,545,283 Premiums receivable 73,915 140,882 Receivable for securities sold 14,036 —
19,674,193 14,765,749
LIABILITIESCurrent LiabilitiesAccrued expenses 51,004 37,601 Withdrawals payable 18,095 17,756 Payable for securities purchased 65,562 140,018
134,661 195,375
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 19,539,532 14,570,374
NET ASSETS PER UNITSeries 1 7.42 6 .99 Series 3 8.07 7 .58 Series 5 8.16 7 .66 Series 6 6.15 5 .76 Series 7 6.19 5 .78
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEInterest for attribution purposes — 1,673 Dividends 241,693 —Changes in fair value:
Net realized gain (loss) on investments 120,445 51,663 Net unrealized gain (loss) on investments 875,955 742,249
1,238,093 795,585
EXPENSESManagement fees and guarantee charge 237,438 142,879 Operating expenses 47,067 31,247
284,505 174,126 Withholding taxes 23,951 —
308,456 174,126
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 929,637 621,459
DATA PER SERIESSERIES 1Increase (Decrease) in Net Assets
from Operations 137,398 118,394 - per unit 0.43 0 .35
Average number of units 319,800 337,202
SERIES 3Increase (Decrease) in Net Assets
from Operations 193,865 157,593 - per unit 0.51 0 .40
Average number of units 378,609 389,339
SERIES 5Increase (Decrease) in Net Assets
from Operations 528,754 343,439 - per unit 0.42 0 .39
Average number of units 1,260,367 889,535
SERIES 6*Increase (Decrease) in Net Assets
from Operations 66,155 2,006 - per unit 0.19 0 .06
Average number of units 341,233 34,173
SERIES 7*Increase (Decrease) in Net Assets
from Operations 3,465 27 - per unit 0.10 0 .13
Average number of units 35,043 200
* Beginning of operations in February 2014.
DFS GIF – AMERICAN EQUITY VALUE – DESJARDINS
Foreign Equity
204 DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 14,570,374 9,124,286 Increase (Decrease) in Net Assets
from operations attributable to contract owners 929,637 621,459
PremiumsSeries 1 131,102 112,204 Series 3 353,959 101,048 Series 5 3,133,351 1,918,467 Series 6* 1,916,049 308,781 Series 7* 293,918 76,001
5,828,379 2,516,501
WithdrawalsSeries 1 (116,987) (102,783)Series 3 (498,414) (178,384)Series 5 (951,451) (347,011)Series 6* (191,604) (356)Series 7* (30,402) —
(1,788,858) (628,534)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 19,539,532 11,633,712
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 929,637 621,459
Adjustments for:Net realized gain (loss) (120,445) (51,663)Net unrealized gain (loss) (875,955) (742,249)
Proceeds from sale/ maturity of investments 925,917 634,403
Investments purchased (4,912,390) (2,290,793)Receivable for securities sold (14,036) 3,613 Accrued expenses 13,403 7,171 Payable for securities purchased (74,456) 22,551
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES (4,128,323) (1,795,508)
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 5,895,346 2,423,233 Amounts paid on withdrawals (1,788,519) (621,999)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES 4,106,827 1,801,234
Effect of exchange rate changes on foreign cash 386 (52)
Increase (decrease) in cash/bank overdraft (21,110) 5,674
Cash (bank overdraft), beginning of period 79,584 58,532
CASH (BANK OVERDRAFT), END OF PERIOD 58,474 64,206
The accompanying notes are an integral part of these financial statements.
DFS GIF – AMERICAN EQUITY VALUE – DESJARDINS (cont.)
Foreign Equity
205DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (99.9%)Desjardins American Equity Value Fund, I-Class 863,717 15,126,066 19,527,768
TOTAL INVESTMENTS 15,126,066 19,527,768
OTHER NET ASSETS (0.1%) 11,764
NET ASSETS (100%) 19,539,532
The accompanying notes are an integral part of these financial statements.
TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
Wells Fargo & Company 3 .7%Merck & Company 3 .5%Exxon Mobil Corporation 3 .5%JPMorgan Chase & Company 3 .3%Chevron Corporation 3 .2%Bank of America Corporation 2 .6%Cisco Systems 2 .4%Cash and Cash Equivalents 2 .4%Citigroup 2 .3%CVS Health Corporation 2 .0%Microsoft Corporation 1 .9%Intel Corporation 1 .8%UnitedHealth Group 1 .7%Verizon Communications 1 .6%Prudential Financial 1 .6%Pfizer 1 .6%Mondelez International Inc . 1 .6%AstraZeneca 1 .5%EOG Resources 1 .5%Comcast Corporation 1 .4%Lowe’s Companies 1 .4%Cardinal Health 1 .4%ACE Ltd 1 .4%PNC Financial Services Group 1 .4%Eversource Energy 1 .4%
206 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo provide investors with long-term capital growth by investing primarily in U .S . equities .
Investment StrategyTo invest primarily in the common shares of high quality, publicly traded mid to large United States companies across a wide range of market sectors .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 19,527,768 — — 19,527,768 TOTAL 19,527,768 — — 19,527,768
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 14,545,283 — — 14,545,283TOTAL 14,545,283 — — 14,545,283
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
DFS GIF – AMERICAN EQUITY VALUE – DESJARDINS (cont.)
Foreign Equity
207DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in the benchmark, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmark, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmark % $ $Russell 1000 Value 3 .00 546,063 445,790
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
208 DFS GUARANTEED INVESTMENT FUNDS
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash — 2,042 Investments at fair value through profit
or loss (FVTPL) 11,975,281 8,061,064 Premiums receivable 6,990 6,354 Receivable for securities sold 25,677 —
12,007,948 8,069,460
LIABILITIESCurrent LiabilitiesBank overdraft 25,023 —Accrued expenses 28,256 17,996 Withdrawals payable 12,421 1,153 Payable for securities purchased 4,690 7,914
70,390 27,063
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 11,937,558 8,042,397
NET ASSETS PER UNITSeries 5 7.64 7 .35 Series 6 5.62 5 .41 Series 7 5.66 5 .43
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEDividends 22,174 —Changes in fair value:
Net realized gain (loss) on investments 57,468 17,137 Net unrealized gain (loss) on investments 258,046 395,898
337,688 413,035
EXPENSESManagement fees and guarantee charge 139,570 62,770 Operating expenses 11,841 5,327
151,411 68,097 Withholding taxes 1,831 —
153,242 68,097
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 184,446 344,938
DATA PER SERIESSERIES 5Increase (Decrease) in Net Assets
from Operations 193,012 342,847 - per unit 0.20 0 .50
Average number of units 988,694 688,982
SERIES 6*Increase (Decrease) in Net Assets
from Operations (1,440) 2,058 - per unit — 0 .05
Average number of units 501,832 44,244
SERIES 7*Increase (Decrease) in Net Assets
from Operations (7,126) 33 - per unit (0.27) 0 .17
Average number of units 26,026 200
* Beginning of operations in February 2014.
DFS GIF – GLOBAL DIVIDEND – DESJARDINS
Foreign Equity
209DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 8,042,397 3,292,634 Increase (Decrease) in Net Assets
from operations attributable to contract owners 184,446 344,938
PremiumsSeries 5 2,593,526 2,003,184 Series 6* 2,150,956 487,884 Series 7* 209,864 1,001
4,954,346 2,492,069
WithdrawalsSeries 5 (1,019,466) (305,654)Series 6* (205,667) (7,781)Series 7* (18,498) —
(1,243,631) (313,435)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 11,937,558 5,816,206
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 184,446 344,938
Adjustments for:Net realized gain (loss) (57,468) (17,139)Net unrealized gain (loss) (258,046) (395,898)
Proceeds from sale/ maturity of investments 416,964 125,646
Investments purchased (4,015,667) (2,246,092)Receivable for securities sold (25,677) (10,831)Accrued expenses 10,260 6,181 Payable for securities purchased (3,224) 13,248
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES (3,748,412) (2,179,947)
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 4,953,710 2,472,630 Amounts paid on withdrawals (1,232,363) (309,301)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES 3,721,347 2,163,329
Increase (decrease) in cash/bank overdraft (27,065) (16,618)
Cash (bank overdraft), beginning of period 2,042 6,285
CASH (BANK OVERDRAFT), END OF PERIOD (25,023) (10,333)
The accompanying notes are an integral part of these financial statements.
210 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.3%)Desjardins Global Dividend Fund, I-Class 653,958 10,854,933 11,975,281
TOTAL INVESTMENTS 10,854,933 11,975,281
OTHER NET ASSETS (-0.3%) (37,723)
NET ASSETS (100%) 11,937,558
The accompanying notes are an integral part of these financial statements.
TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
Cash and Cash Equivalents 3 .1%Reynolds American 2 .5%AT&T 1 .9%Vodafone Group plc 1 .9%BCE 1 .8%National Grid 1 .8%Altria Group Inc . 1 .8%Philip Morris International 1 .7%Imperial Tobacco Group plc 1 .7%Swisscom 1 .7%Kinder Morgan 1 .7%Verizon Communications 1 .6%Health Care REIT 1 .6%Duke Energy Corporation 1 .5%Muenchener Rueckversicherung 1 .5%Royal Dutch Shell 1 .5%SSE 1 .5%Total SA 1 .4%Telstra Corporation Ltd 1 .4%GlaxoSmithKline plc 1 .4%Ameren Corporation 1 .4%Rogers Communications 1 .4%United Utilities 1 .4%CenturyLink 1 .4%Terna - Rete Elettricita Nazionale 1 .4%
DFS GIF – GLOBAL DIVIDEND – DESJARDINS (cont.)
Foreign Equity
211DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveThe objective of this Fund is to provide dividend income and long term capital appreciation through the investment in equity and equity related securities of companies around the world, including, when deemed appropriate, emerging markets .
Investment StrategyIn order to achieve its investment objective, the Fund invests in companies with high dividend yields and whose management teams optimize their balance sheets through the redemption of shares or reducing debt or by opting to increase cash flows sufficiently to allow for the opportunity for dividend growth . Companies are selected which show stable or high profit growth, a lower than average debt in comparison to their industry average and whose securities are traded at a reasonable price in relation to other companies with similar characteristics . Equity related securities such as American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs) may be used to gain exposure to a particular stock or sector .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 11,975,281 — — 11,975,281 TOTAL 11,975,281 — — 11,975,281
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 8,061,064 — — 8,061,064 TOTAL 8,061,064 — — 8,061,064
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
212 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s best estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in the benchmark, with all other variables held constant, is as follows:
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmark % $ $MSCI World Net 3 .00 358 127 241 272
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
DFS GIF – GLOBAL DIVIDEND – DESJARDINS (cont.)
Foreign Equity
213DFS GUARANTEED INVESTMENT FUNDS
DFS GIF – GLOBAL EQUITY – MFS
Foreign Equity
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 30,607 32,356 Investments at fair value through profit
or loss (FVTPL) 25,425,619 23,205,563 Premiums receivable 8,331 25 Receivable for securities sold 1,526 —
25,466,083 23,237,944
LIABILITIESCurrent LiabilitiesAccrued expenses 61,654 56,001 Withdrawals payable 4,534 301 Payable for securities purchased 5,179 6,898
71,367 63,200
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 25,394,716 23,174,744
NET ASSETS PER UNITSeries 3 4.28 3 .86 Series 5 4.41 3 .97 Series 6 5.85 5 .25 Series 7 5.88 5 .27
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEInterest for attribution purposes 34 37 Dividends 284,453 293,488 Changes in fair value:
Net realized gain (loss) on investments 390,286 260,576 Net unrealized gain (loss) on investments 2,319,276 595,633
2,994,049 1,149,734
EXPENSESManagement fees and guarantee charge 278,839 246,696 Operating expenses 86,399 77,335
365,238 324,031 Withholding taxes 32,724 30,309
397,962 354,340
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 2,596,087 795,394
DATA PER SERIESSERIES 3Increase (Decrease) in Net Assets
from Operations 18,118 5,097 - per unit 0.39 0 .12
Average number of units 46,947 41,808
SERIES 5Increase (Decrease) in Net Assets
from Operations 2,560,451 790,108 - per unit 0.45 0 .13
Average number of units 5,659,213 5,934,369
SERIES 6*Increase (Decrease) in Net Assets
from Operations 15,132 186 - per unit 0.28 0 .06
Average number of units 54,107 2,919
SERIES 7*Increase (Decrease) in Net Assets
from Operations 2,386 3 - per unit 0.61 0 .01
Average number of units 3,940 200
* Beginning of operations in February 2014.
214 DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 23,174,744 21,982,867 Increase (Decrease) in Net Assets
from operations attributable to contract owners 2,596,087 795,394
PremiumsSeries 3 43,187 13,527 Series 5 269,024 340,685 Series 6* 365,653 24,132 Series 7* — 1,001
677,864 379,345
WithdrawalsSeries 3 (11,449) (4,680)Series 5 (1,039,559) (888,251)Series 6* (2,971) (28)Series 7* — —
(1,053,979) (892,959)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 25,394,716 22,264,647
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 2,596,087 795,394
Adjustments for:Net realized gain (loss) (390,286) (260,576)Net unrealized gain (loss) (2,319,276) (595,633)
Proceeds from sale/ maturity of investments 1,165,382 1,143,498
Investments purchased (675,876) (564,648)Receivable for securities sold (1,526) 12,771 Accrued expenses 5,653 2,606 Payable for securities purchased (1,719) —
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES 378,439 533,412
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 669,558 369,117 Amounts paid on withdrawals (1,049,746) (902,598)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES (380,188) (533,481)
Increase (decrease) in cash/bank overdraft (1,749) (69)
Cash (bank overdraft), beginning of period 32,356 25,002
CASH (BANK OVERDRAFT), END OF PERIOD 30,607 24,933
The accompanying notes are an integral part of these financial statements.
DFS GIF – GLOBAL EQUITY – MFS (cont.)
Foreign Equity
215DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.1%)MFS Global Research Fund 1,288,253 16,235,647 25,425,619
TOTAL INVESTMENTS 16,235,647 25,425,619
OTHER NET ASSETS (-0.1%) (30,903)
NET ASSETS (100%) 25,394,716
The accompanying notes are an integral part of these financial statements.
TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
Danaher Corporation 1 .5%Novartis AG 1 .4%Exxon Mobil Corporation 1 .3%Allergan 1 .3%Wells Fargo & Company 1 .3%Roche Holding AG 1 .2%BG Group 1 .2%JPMorgan Chase & Company 1 .2%Biogen Idec Inc . 1 .1%Visa 1 .1%Google 1 .1%CVS Health Corporation 1 .1%UBS Group AG 1 .1%HSBC Holdings plc 1 .1%Time Warner 1 .0%CMS Energy Corporation 1 .0%Twenty-First Century Fox Inc . 1 .0%Valeant Pharmaceuticals International 1 .0%Nestlé SA 1 .0%KDDI Corporation 1 .0%American Express Company 1 .0%AIA Group 1 .0%Thermo Fisher Scientific 1 .0%Abbott Laboratories 0 .9%American International Group 0 .9%
216 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo achieve long-term capital growth by investing primarily in equity securities .
Investment StrategyTo control the level of volatility of return relative to the overall stock markets by maintaining strong geographic diversification and by investing in attractively-valued securities . The Fund will primarily invest in common stocks of American, European, and Asian corporations .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds — 25,425,619 — 25,425,619 TOTAL — 25,425,619 — 25,425,619
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds — 23,205,563 — 23,205,563 TOTAL — 23,205,563 — 23,205,563
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
DFS GIF – GLOBAL EQUITY – MFS (cont.)
Foreign Equity
217DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in the benchmark, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmark, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmark % $ $MSCI All Country World Net 3 .00 754,398 861,608
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
RECONCILIATION OF NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS (“NET ASSET”) PER UNIT AS PER THE FINANCIAL STATEMENTS WITH NET ASSET VALUE PER UNIT FOR PURPOSES OTHER THAN THE FINANCIAL STATEMENTS
As a result of new information received in January 2015, the Net Asset per unit as per the financial statements was adjusted to consider the new information . This created a difference between the Net Asset per unit as per financial statements and the Net Asset Value per unit for purposes other than the financial statements .
As at December 31, 2014
For the Series 3, the Net Asset per unit as per the financial statements is 3 .86 (the Net Asset Value per unit for purposes other than the financial statements is 3 .88) .
For the Series 5, the Net Asset per unit as per the financial statements is 3 .97 (the Net Asset Value per unit for purposes other than the financial statements is 3 .99) .
For the Series 6, the Net Asset per unit as per the financial statements is 5 .25 (the Net Asset Value per unit for purposes other than the financial statements is 5 .28) .
For the Series 7, the Net Asset per unit as per the financial statements is 5 .27 (the Net Asset Value per unit for purposes other than the financial statements is 5 .30) .
218 DFS GUARANTEED INVESTMENT FUNDS
DFS GIF – GLOBAL – FIDELITY
Foreign Equity
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 49,716 28,970 Investments at fair value through profit
or loss (FVTPL) 34,997,817 32,058,535 Premiums receivable 87,295 1,008 Receivable for securities sold 19,349 7,961
35,154,177 32,096,474
LIABILITIESCurrent LiabilitiesAccrued expenses 97,124 87,951 Withdrawals payable 105,785 5,237 Payable for securities purchased 15,785 1,008
218,694 94,196
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 34,935,483 32,002,278
NET ASSETS PER UNITSeries 3 7.30 6 .36 Series 5 7.58 6 .59
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEChanges in fair value:
Net realized gain (loss) on investments 1,298,259 487,278 Net unrealized gain (loss) on investments 3,963,803 960,320
5,262,062 1,447,598
EXPENSESManagement fees and guarantee charge 474,801 419,936 Operating expenses 98,046 86,579
572,847 506,515
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 4,689,215 941,083
DATA PER SERIESSERIES 3Increase (Decrease) in Net Assets
from Operations 347,138 69,778 - per unit 0.94 0 .17
Average number of units 367,726 411,661
SERIES 5Increase (Decrease) in Net Assets
from Operations 4,342,077 871,305 - per unit 1.00 0 .19
Average number of units 4,349,677 4,578,345
219DFS GUARANTEED INVESTMENT FUNDS
The accompanying notes are an integral part of these financial statements.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 32,002,278 29,809,132 Increase (Decrease) in Net Assets
from operations attributable to contract owners 4,689,215 941,083
PremiumsSeries 3 217,364 96,010 Series 5 1,617,656 1,331,105
1,835,020 1,427,115
WithdrawalsSeries 3 (381,550) (270,639)Series 5 (3,209,480) (1,354,539)
(3,591,030) (1,625,178)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 34,935,483 30,552,152
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 4,689,215 941,083
Adjustments for:Net realized gain (loss) (1,298,259) (487,278)Net unrealized gain (loss) (3,963,803) (960,320)
Proceeds from sale/ maturity of investments 3,085,165 1,809,921
Investments purchased (762,385) (1,111,088)Receivable for securities sold (11,388) (15,255)Accrued expenses 9,173 4,885 Payable for securities purchased 14,777 (127)
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES 1,762,495 181,821
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 1,748,733 1,425,106 Amounts paid on withdrawals (3,490,482) (1,608,124)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES (1,741,749) (183,018)
Increase (decrease) in cash/bank overdraft 20,746 (1,197)
Cash (bank overdraft), beginning of period 28,970 33,934
CASH (BANK OVERDRAFT), END OF PERIOD 49,716 32,737
220 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.2%)Fidelity Global Fund, Series O 660,886 19,535,982 34,997,817
TOTAL INVESTMENTS 19,535,982 34,997,817
OTHER NET ASSETS (-0.2%) (62,334)
NET ASSETS (100%) 34,935,483
The accompanying notes are an integral part of these financial statements.
TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
Aetna Inc . 2 .8%JPMorgan Chase & Company 2 .6%Walt Disney Company 2 .5%Comcast Corporation 2 .5%Citigroup 2 .2%Nitto Denko Corporation 2 .1%Google 2 .0%Microsoft Corporation 1 .9%Lowe’s Companies 1 .8%eBay 1 .8%KDDI Corporation 1 .8%Holcim AG 1 .7%MS&AD Insurance Group Holdings Inc . 1 .7%Mylan 1 .7%Morgan Stanley 1 .6%Airbus Group 1 .6%ING Groep NV 1 .5%Time Warner 1 .5%Marathon Petroleum Corporation 1 .4%Bridgestone Corporation 1 .4%Cooper Companies 1 .4%ORIX Corporation 1 .3%Clariant AG 1 .3%Lam Research Corporation 1 .2%ON Semiconductor 1 .2%
DFS GIF – GLOBAL – FIDELITY (cont.)
Foreign Equity
221DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveTo achieve long-term capital growth by investing primarily in equity securities of companies anywhere in the world while remaining diversified with respect to major geographic regions, capitalizations, sectors, styles, and individual holdings .
Investment StrategyTo invest primarily in the common shares and other equity investments of companies with attractive relative valuations located in many countries .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 34,997,817 — — 34,997,817 TOTAL 34,997,817 — — 34,997,817
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 32,058,535 — — 32,058,535 TOTAL 32,058,535 — — 32,058,535
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
222 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in the benchmark, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmark, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmark % $ $MSCI All Country World Net 3 .00 1,030,804 912,713
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
DFS GIF – GLOBAL – FIDELITY (cont.)
Foreign Equity
223DFS GUARANTEED INVESTMENT FUNDS
DFS GIF – INTERNATIONAL EQUITY – MFS
Foreign Equity
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 2,850 23,667 Investments at fair value through profit
or loss (FVTPL) 12,177,720 11,123,562 Premiums receivable 15,272 1,041 Receivable for securities sold 21,113 634 Interest, dividends and other receivables 330 333
12,217,285 11,149,237
LIABILITIESCurrent LiabilitiesAccrued expenses 34,102 31,234 Withdrawals payable 49,616 112 Payable for securities purchased 2,148 910
85,866 32,256
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 12,131,419 11,116,981
NET ASSETS PER UNITSeries 1 6.33 5 .57 Series 3 6.54 5 .75 Series 5 7.02 6 .15 Series 6 5.60 4 .91 Series 7 5.63 4 .93
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEInterest for attribution purposes 267 (23)Changes in fair value:
Net realized gain (loss) on investments 332,534 222,572 Net unrealized gain (loss) on investments 1,407,731 219,628
1,740,532 442,177
EXPENSESManagement fees and guarantee charge 161,281 159,949 Operating expenses 42,680 42,772
203,961 202,721 Withholding taxes 3 —
203,964 202,721
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 1,536,568 239,456
DATA PER SERIESSERIES 1Increase (Decrease) in Net Assets
from Operations 274,285 37,064 - per unit 0.77 0 .10
Average number of units 355,517 384,607
SERIES 3Increase (Decrease) in Net Assets
from Operations 740,648 113,966 - per unit 0.83 0 .11
Average number of units 893,267 1,030,838
SERIES 5Increase (Decrease) in Net Assets
from Operations 509,703 88,431 - per unit 0.88 0 .14
Average number of units 578,511 635,852
SERIES 6*Increase (Decrease) in Net Assets
from Operations 1,711 —- per unit 0.08 —
Average number of units 21,659 2,050
SERIES 7*Increase (Decrease) in Net Assets
from Operations 10,221 (5)- per unit 0.49 (0 .03)
Average number of units 20,811 200
* Beginning of operations in February 2014.
224 DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 11,116,981 12,263,629 Increase (Decrease) in Net Assets
from operations attributable to contract owners 1,536,568 239,456
PremiumsSeries 1 74,280 42,627 Series 3 198,623 165,220 Series 5 505,455 268,900 Series 6* 260,291 12,640 Series 7* 58,000 1,001
1,096,649 490,388
WithdrawalsSeries 1 (135,618) (106,408)Series 3 (918,275) (702,463)Series 5 (564,616) (432,374)Series 6* (270) (3)Series 7* — —
(1,618,779) (1,241,248)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 12,131,419 11,752,225
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 1,536,568 239,456
Adjustments for:Net realized gain (loss) (332,534) (222,572)Net unrealized gain (loss) (1,407,731) (219,628)
Proceeds from sale/ maturity of investments 1,362,780 1,459,234
Investments purchased (676,673) (500,620)Receivable for securities sold (20,479) (30,148)Interest, dividends and other
receivables 3 4,375 Accrued expenses 2,868 (42)Payable for securities purchased 1,238 (976)
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES 466,040 729,079
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 1,082,418 490,707 Amounts paid on withdrawals (1,569,275) (1,244,804)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES (486,857) (754,097)
Effect of exchange rate changes on foreign cash — (64)
Increase (decrease) in cash/bank overdraft (20,817) (25,082)
Cash (bank overdraft), beginning of period 23,667 10,515
CASH (BANK OVERDRAFT), END OF PERIOD 2,850 (14,567)
SUPPLEMENTAL INFORMATION ON CASH FLOWS FROM/USED IN OPERATING ACTIVITIESDividends received, net of
withholding taxes — 4,375
The accompanying notes are an integral part of these financial statements.
DFS GIF – INTERNATIONAL EQUITY – MFS (cont.)
Foreign Equity
225DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.4%)MFS International Equity Fund 926,063 9,004,245 12,177,720
TOTAL INVESTMENTS 9,004,245 12,177,720
OTHER NET ASSETS (-0.4%) (46,301)
NET ASSETS (100%) 12,131,419
The accompanying notes are an integral part of these financial statements.
TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
Bayer AG 3 .8%Nestlé 3 .4%Compass Group plc 3 .1%WPP Group plc 3 .0%UBS Group AG 2 .6%Roche Holding AG 2 .5%Hoya Corporation 2 .5%ING Groep NV 2 .3%Taiwan Semiconductor Manufacturing Company 2 .3%AIA Group 2 .3%Yum! Brands 2 .2%Air Liquide 2 .2%Honda Motor Company Ltd 2 .2%Denso Corporation 2 .2%Pernod-Ricard SA 2 .2%Groupe Danone 2 .1%Reckitt Benckiser Group plc 2 .1%Novartis AG 2 .1%Schneider Electric 2 .1%HSBC Holdings plc 2 .1%DBS Group Holdings Ltd 1 .8%SAP SE 1 .8%Akzo Nobel NV 1 .7%Moet Hennessy Louis Vuitton 1 .7%Diageo plc 1 .7%
226 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveThe fundamental investment objective of this Fund is to provide investors with long-term capital growth based on an internationally diversified equity portfolio by investing primarily in Europe and the Far East .
Investment StrategyTo invest its assets primarily in the common shares of large corporations with attractive relative valuations located in many countries .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds — 12,177,720 — 12,177,720 TOTAL — 12,177,720 — 12,177,720
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds — 11,123,562 — 11,123,562 TOTAL — 11,123,562 — 11,123,562
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
DFS GIF – INTERNATIONAL EQUITY – MFS (cont.)
Foreign Equity
227DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in the benchmark, using a historical beta coefficient (a measure of the sensitivity of a security in comparison to the market) between the Fund’s return as compared to the return of the Fund’s benchmark, with all other variables held constant, is included in the following table . A 36-month regression analysis has been utilized to estimate the historical beta coefficient . The regression analysis uses data based on the monthly returns of the Fund .
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmark % $ $MSCI EAFE Net 3 .00 396,556 338,426
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
RECONCILIATION OF NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS (“NET ASSET”) PER UNIT AS PER THE FINANCIAL STATEMENTS WITH NET ASSET VALUE PER UNIT FOR PURPOSES OTHER THAN THE FINANCIAL STATEMENTS
As a result of new information received in January 2015, the Net Asset per unit as per the financial statements was adjusted to consider the new information . This created a difference between the Net Asset per unit as per financial statements and the Net Asset Value per unit for purposes other than the financial statements .
As at December 31, 2014
For the Series 1, the Net Asset per unit as per the financial statements is 5 .57 (the Net Asset Value per unit for purposes other than the financial statements is 5 .45) .
For the Series 3, the Net Asset per unit as per the financial statements is 5 .75 (the Net Asset Value per unit for purposes other than the financial statements is 5 .62) .
For the Series 5, the Net Asset per unit as per the financial statements is 6 .15 (the Net Asset Value per unit for purposes other than the financial statements is 6 .01) .
For the Series 6, the Net Asset per unit as per the financial statements is 4 .91 (the Net Asset Value per unit for purposes other than the financial statements is 4 .80) .
For the Series 7, the Net Asset per unit as per the financial statements is 4 .93 (the Net Asset Value per unit for purposes other than the financial statements is 4 .82) .
228 DFS GUARANTEED INVESTMENT FUNDS
DFS GIF – INTERNATIONAL EQUITY GROWTH – DESJARDINS
Foreign Equity
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As atJune 30
2015December 31
2014$ $
(unaudited) (audited)
ASSETSCurrent AssetsCash 560 496 Investments at fair value through profit
or loss (FVTPL) 2,308,855 1,869,392 Premiums receivable 4,251 85
2,313,666 1,869,973
LIABILITIESCurrent LiabilitiesAccrued expenses 5,961 4,656 Withdrawals payable 247 195 Payable for securities purchased 195 85
6,403 4,936
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS 2,307,263 1,865,037
NET ASSETS PER UNITSeries 5 8.04 7 .11 Series 6 5.50 4 .85 Series 7 5.52 4 .87
STATEMENT OF COMPREHENSIVE INCOME – unauditedSix-month Periods Ended June 30
2015 2014$ $
INCOMEDividends 24,716 13,887 Changes in fair value:
Net realized gain (loss) on investments 28,303 14,714 Net unrealized gain (loss) on investments 225,734 (11,813)
278,753 16,788
EXPENSESManagement fees and guarantee charge 29,749 15,927 Operating expenses 3,657 2,218
33,406 18,145 Withholding taxes 1,399 2,083
34,805 20,228
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ATTRIBUTABLE TO CONTRACT OWNERS 243,948 (3,440)
DATA PER SERIESSERIES 5Increase (Decrease) in Net Assets
from Operations 165,205 (1,797)- per unit 0.90 (0 .01)
Average number of units 184,084 153,404
SERIES 6*Increase (Decrease) in Net Assets
from Operations 76,024 (1,617)- per unit 0.59 (0 .09)
Average number of units 128,777 17,086
SERIES 7*Increase (Decrease) in Net Assets
from Operations 2,719 (26)- per unit 0.66 (0 .13)
Average number of units 4,150 200
* Beginning of operations in February 2014.
229DFS GUARANTEED INVESTMENT FUNDS
* Beginning of operations in February 2014.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS – unaudited
Six-month Periods Ended June 302015 2014
$ $
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, BEGINNING OF PERIOD 1,865,037 936,456 Increase (Decrease) in Net Assets
from operations attributable to contract owners 243,948 (3,440)
PremiumsSeries 5 204,812 294,995 Series 6* 182,519 191,978 Series 7* — 1,001
387,331 487,974
WithdrawalsSeries 5 (113,555) (97,459)Series 6* (75,498) (108)Series 7* — —
(189,053) (97,567)
NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS, END OF PERIOD 2,307,263 1,323,423
STATEMENT OF CASH FLOWS – unauditedSix-month Periods Ended June 30
2015 2014$ $
CASH FLOWS FROM/USED IN OPERATING ACTIVITIESIncrease (decrease) in net assets
from operations attributable to contract owners 243,948 (3,440)
Adjustments for:Net realized gain (loss) (28,303) (14,714)Net unrealized gain (loss) (225,734) 11,813
Proceeds from sale/ maturity of securities 162,215 86,584
Investments purchased (347,641) (471,667)Accrued expenses 1,305 1,094 Payable for securities purchased 110 (5,421)
NET CASH FLOWS FROM/USED IN OPERATING ACTIVITIES (194,100) (395,751)
CASH FLOWS FROM/USED IN FINANCING ACTIVITIESPremium payments 383,165 490,754 Amounts paid on withdrawals (189,001) (99,933)
NET CASH FLOWS FROM/USED IN FINANCING ACTIVITIES 194,164 390,821
Increase (decrease) in cash/bank overdraft 64 (4,930)
Cash (bank overdraft), beginning of period 496 5,440
CASH (BANK OVERDRAFT), END OF PERIOD 560 510
The accompanying notes are an integral part of these financial statements.
230 DFS GUARANTEED INVESTMENT FUNDS
SCHEDULE OF INVESTMENT PORTFOLIO – unaudited
as at June 30, 2015Number of Units Cost
Fair Value
$ $
INVESTMENT FUND (100.1%)Desjardins Overseas Equity Growth Fund, I-Class 114,441 1,925,844 2,308,855
TOTAL INVESTMENTS 1,925,844 2,308,855
OTHER NET ASSETS (-0.1%) (1,592)
NET ASSETS (100%) 2,307,263
The accompanying notes are an integral part of these financial statements.
TOP 25 HOLDINGS OF THE UNDERLYING FUND – unaudited
Security Name Percentage of Portfolio
Tencent Holdings 4 .9%Inditex 4 .6%Fiat Chrysler Automobiles 4 .5%Baidu, ADR 4 .3%AIA Group 4 .2%Softbank Corporation 3 .6%Rolls-Royce Holdings 3 .3%Rakuten 3 .0%Alibaba Group Holding 2 .9%Atlas Copco 2 .7%ARM Holdings 2 .7%Prudential Financial 2 .6%Unicredit 2 .6%L’Oréal 2 .6%Banco Popular Espanol 2 .6%Svenska Handelsbanken 2 .2%Cash and Cash Equivalents 2 .2%Investment AB Kinnevik 2 .2%SMC Corporation 2 .1%Syngenta 2 .1%Novo Nordisk 2 .0%Hong Kong Exchanges & Clearing 1 .6%Compagnie Financière Richemont 1 .5%Kering 1 .5%MercadoLibre 1 .4%
DFS GIF – INTERNATIONAL EQUITY GROWTH – DESJARDINS (cont.)
Foreign Equity
231DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
STRATEGY IN USING FINANCIAL INSTRUMENTS
Investment ObjectiveThe objective of this Fund is to achieve long term capital growth by investing in equity and equity related securities of companies located or operating outside of North America, while when appropriate, also investing in equity and equity related securities of companies located or operating in emerging markets .
Investment StrategyInvestment decisions are backed by extensive research and analysis with preference given to those companies that can sustain above average growth in earnings and cash flow and whose securities are traded at a reasonable price . The investment approach involves a bottom-up, stock driven approach to country and sector allocation and more specifically, those companies with sustainable competitive advantages and strong management teams operating in a favourable market background and display solid financial characteristics .
FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENT (Note 7)
Hierarchy of Financial Instruments at Fair Value MeasurementThe following tables categorize the Fund’s financial assets fair value measurement according to a three-level hierarchy . The methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities . The fair value measurement is described in the “Significant Accounting Policies“ section of Note 2 .
Investment Fair Value Measurement at the End of the Period, within the Following Levels:
As at June 30, 2015 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 2,308,855 — — 2,308,855 TOTAL 2,308,855 — — 2,308,855
As at December 31, 2014 Level 1 Level 2 Level 3 Total$ $ $ $
Financial Assets at FVTPLInvestment Funds 1,869,392 — — 1,869,392 TOTAL 1,869,392 — — 1,869,392
Transfers between Levels 1 and 2During the periods ended June 30, 2015 and December 31, 2014, there were no transfers of securities between Levels 1 and 2 .
Investments Entities (Note 2)Total values of index-based investments, mortgage-backed securities, asset-backed securities, investment funds and limited partnerships in the table “Investment Fair Value Measurement within the Levels” also represent the fair value of investments in structured entities .
FINANCIAL INSTRUMENTS RISKS (Note 7)
Underlying Fund Risk ManagementMonthly, the investment strategy team compares the Fund’s performance to similar funds as well as to the related benchmarks .Quarterly, this team makes an analysis of the Fund’s performance . This analysis includes among others a review of the securities having obtained a greater or lower performance than forecasts, an evaluation of the strategies used as well as a complete analysis of the sector . It also ensures the compliance with the Fund’s investment policies . Furthermore, it examines thoughtfully any change within the organization, such as the recruitment, the departure of key staff or any structure modification .Annually, this team reviews the practices and processes used by the Fund’s managers through an exhaustive questionnaire and periodic meetings .
232 DFS GUARANTEED INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS – SPECIFIC INFORMATION – unaudited
as at June 30, 2015
Currency RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to currency risk . As a result, the Fund may be exposed to currency risk related to the current underlying fund . Detailed disclosure about the currency risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Interest Rate RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to interest rate risk . As a result, the Fund may be exposed to interest rate risk related to the current underlying fund . Detailed disclosure about the interest rate risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Concentration RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to concentration risk . As a result, the Fund is exposed to concentration risk related to the current underlying fund . Detailed disclosure about the concentration risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Price RiskThe majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to price risk . As a result, the Fund is exposed to price risk related to the current underlying fund . Detailed disclosure about the price risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .The Manager’s best estimate of the impact on Net Assets Attributable to Contract Owners as a result of a reasonably possible change in the benchmark, with all other variables held constant, is as follows:
Change in PriceImpact on Net Assets
Attributable to Contract OwnersJune 30, 2015 December 31, 2014
Benchmark % $ $MSCI EAFE Net 3 .00 69,218 55,951
In practice, actual trading results may differ from these sensitivity analyses and the differences could be significant .
Credit RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which may be exposed to credit risk . As a result, the Fund may be exposed to credit risk related to the current underlying fund . Detailed disclosure about the credit risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .
Liquidity RiskAs at June 30, 2015 and December 31, 2014, the majority of the Net Assets Attributable to Contract Owners are invested in an underlying fund which is exposed to liquidity risk . As a result, the Fund is exposed to liquidity risk related to the current underlying fund . Detailed disclosure about the liquidity risk on the underlying fund can be obtained from Desjardins Financial Security (see Note 7) .For further information on maturity of financial liabilities and liquidity risk management of the Fund, please refer to Note 7 “Financial Instruments Disclosures” .
NOTES TO THE FINANCIAL STATEMENTS – unaudited
233DFS GUARANTEED INVESTMENT FUNDS
Six-months Periods ended June 30, 2015 and 2014
1. ESTABLISHMENT OF THE FUNDSThe Desjardins Financial Security Guaranteed Investment Funds (the “Funds“) consist of thirty-nine Funds established by Desjardins Financial Security Life Assurance Company (“Desjardins Financial Security“ or the “Company“) in respect of individual variable insurance contracts issued under the Desjardins Financial Security Guaranteed Investment Funds Plan – Helios, Helios 2 and the Millennia III Plan . The assets of each Fund are segregated from the Company’s other assets and are owned by Desjardins Financial Security . The Funds are not separate legal entities . The Company’s head office is located at 200, rue des Commandeurs, Lévis, Québec, Canada G6V 6R2 .The Funds were established on the following dates by resolutions of the Board of Directors:
Series 1 Series 3 Series 5 Series 6 Series 7 Series IGP
INVESTMENTS SOLUTIONSConservative – Multi-managers — — — Feb . 24, 2014 Feb . 24, 2014 —Moderate – Multi-managers — — — Feb . 24, 2014 Feb . 24, 2014 —Balanced – Multi-managers — — — Feb . 24, 2014 Feb . 24, 2014 —Growth – Multi-managers — — — Feb . 24, 2014 Feb . 24, 2014 —Maximum Growth – Multi-managers — — — Feb . 24, 2014 Feb . 24, 2014 —
INDIVIDUAL FUNDSIncomeMoney Market Nov . 15, 1995 Dec . 14, 1998 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 Nov . 7, 2014Income – Beutel Goodman — Apr . 17, 2000 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Income – Fiera Nov . 15, 1995 Dec . 14, 1998 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Balanced and Asset AllocationDiversified Income – Quotential — Oct . 30, 2000 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Balanced Income – Quotential — Oct . 30, 2000 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Canadian Balanced – Fidelity — Dec . 1, 2008 Dec . 1, 2008 Feb . 24, 2014 Feb . 24, 2014 —Canadian Balanced – Fiera Nov . 15, 1995 Dec . 14, 1998 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Canadian Balanced – Bissett — Dec . 5, 2005 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Balanced Growth – Quotential — Dec . 11, 2006 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Canadian Balanced – CI Signature — — May 3, 2010 Feb . 24, 2014 Feb . 24, 2014 —Balanced – Ethical — — May 3, 2010 Feb . 24, 2014 Feb . 24, 2014 —Income and Growth – CI Signature — — Sept . 24, 2012 Feb . 24, 2014 Feb . 24, 2014 —Growth and Income – Northwest — Dec . 11, 2006 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Global Growth – Northwest Select — Jan . 14, 2002 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Global Balanced – Jarislowsky Fraser — Nov . 17, 2003 Oct . 29, 2007 — — —Canadian Asset Allocation – CI Cambridge — — Sept . 24, 2012 Feb . 24, 2014 Feb . 24, 2014 —Growth – Quotential — Oct . 30, 2000 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Global High Income – Multi-managers — Mar . 12, 2007 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Canadian EquityDividend Income – Bissett — Apr . 17, 2000 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Canadian Dividend – Fiera Dec . 16, 1997 Dec . 14, 1998 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Canadian Dividend – Northwest — — Sept . 24, 2012 Feb . 24, 2014 Feb . 24, 2014 —Canadian Equity – Fidelity True North® — Dec . 1, 2008 Dec . 1, 2008 Feb . 24, 2014 Feb . 24, 2014 —Canadian Equity – Bissett — Apr . 17, 2000 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Canadian Equity – Fiera Nov . 15, 1995 Dec . 14, 1998 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 Nov . 7, 2014Canadian Equity – Jarislowsky Fraser — Dec . 5, 2005 Oct . 29, 2007 — — —Specialty Equity – Northwest — Dec . 11, 2006 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Small Cap – Bissett — Apr . 17, 2000 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Foreign EquityAmerican Equity – MFS — Apr . 17, 2000 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —American Equity Value – Desjardins Nov . 15, 1995 Dec . 14, 1998 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Global Dividend – Desjardins — — Sept . 24, 2012 Feb . 24, 2014 Feb . 24, 2014 —Global Equity – MFS — Dec . 1, 2008 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —Global – Fidelity — Nov . 17, 2003 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —International Equity – MFS Nov . 15, 1995 Dec . 14, 1998 Oct . 29, 2007 Feb . 24, 2014 Feb . 24, 2014 —International Equity Growth – Desjardins — — Sept . 24, 2012 Feb . 24, 2014 Feb . 24, 2014 —
The interim financial statements (“financial statements“) of the Funds are presented in Canadian dollars (CAD), the Funds’ functional and presentation currency .
NOTES TO THE FINANCIAL STATEMENTS – unaudited
234 DFS GUARANTEED INVESTMENT FUNDS
2. BASIS OF PRESENTATION
International Financial Reporting Standards (“IFRS“)These financial statements have been prepared in compliance with International Financial Reporting Standards (“IFRS“), applicable to the preparation of financial statements . The Funds adopted this basis of accounting in 2014, as required by Canadian securities legislation and the Canadian Accounting Standards Board .
Statement of Compliance The policies applied in these financial statements are based on IFRS published and adopted as of September 18, 2015, the date on which financial statements have been approved for publication by the Audit and Risk Management Committee of the Company .
Significant Accounting PoliciesThe significant measurement and presentation policies applied to prepare these financial statements are described below .
Financial Assets and LiabilitiesThe Funds’ financial assets consist primarily of investments in non-derivative financial instruments and derivative financial instruments presented in the Schedule of Investment Portfolio . Financial liabilities consist primarily of derivative financial instruments . Financial assets and liabilities are recognized on the date the Funds become a party to the contractual provisions of the instrument, namely the trade date .
Classification of Financial InstrumentsThe Funds classify their financial assets and liabilities in the following categories:Financial assets at fair value through profit or loss (“FVTPL“): • Held for trading: derivative financial instruments;• Designated at FVTPL: all other investments including equity and fixed-income securities .Financial assets at amortized cost:• Loans and receivables: cash and all other receivables .Financial liabilities at FVTPL:• Held for trading: derivative financial instruments and short positions .Financial liabilities at amortized cost:• Bank overdraft and all other payables .A financial instrument is designated at FVTPL if it eliminates or significantly reduces a measurement or a recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognizing the gains and losses on them on different bases .The Funds’ obligation concerning net assets attributable to holders of redeemable units is recorded at the redemption amount that approximates fair value . The accounting policies used to measure the fair value of investments and derivatives are identical to those used in measuring the net asset value for transactions with contract owners except where the closing price for financial assets and liabilities is not within the bid-ask spread .As at June 30, 2015 and December 31, 2014, there were no differences between the Funds’ net asset value per unit for transactions and their net assets attributable to contract owners of redeemable units in accordance with IFRS, except for the DFS GIF – Global Equity – MFS and the DFS GIF – International Equity – MFS as at December 31, 2014 .
Determination of the Fair Value of Financial InstrumentsFair value is the price that would be received from selling an asset or paid to transfer a liability in an ordinary transaction between market participants at the valuation date . The fair value of financial assets and liabilities traded in active markets are based on quoted market prices at the close of trading on the valuation date and there is little subjectivity in its determination . The Funds use the closing price for both financial assets and financial liabilities where this price falls within the bid-ask spread . In circumstances where the closing price is not within the bid-ask spread, the Company determines the point within the bid-ask spread that is most representative of fair value based on the specific facts and circumstances . The fair value of financial assets and liabilities that are not traded in an active market, including over-the-counter derivatives, is determined using valuation techniques . The Funds use a variety of methods and make assumptions that are based on existing market conditions at each valuation date . Valuation techniques include the use of comparable recent arm’s length transactions, the fair value of other instruments that are substantially the same, discounted cash flow analysis, option pricing models and others commonly used by market participants and which make the maximum use of observable inputs . Refer to Note 7, “Financial Instruments Disclosures” for further information about the Funds’ fair value measurements .LiquidityCash (bank overdraft) is measured at cost, which closely approximates fair value .Money Market SecuritiesMoney market securities are recorded at cost, together with accrued interest, which closely approximates fair value .Equities and Index-Based InvestmentsEquity and index-based investments securities are recorded at the closing price of the accredited stock exchange on which the corresponding security is principally traded . Non-rated warrants are valued with a recognized valuation model, including Black & Scholes .
NOTES TO THE FINANCIAL STATEMENTS – unaudited (cont.)
235DFS GUARANTEED INVESTMENT FUNDS
Bonds, Mortgage-Backed Securities and Asset-Backed SecuritiesBonds, mortgage-backed securities and asset-backed securities are valued based on prices obtained from recognized securities dealers .Investment FundsUnits of underlying funds are generally valued based on the net asset value per unit provided by the underlying fund’s manager at the end of each valuation day .Derivative Financial InstrumentsCertain Funds may use an array of derivative financial instruments such as foreign currency forward and futures contracts for hedging purposes or purposes other than hedging, or both . The fair value of derivative financial instruments is presented without taking into account the impact of legally binding master netting agreements .
Foreign Currency Forward Contracts and Forward ContractsThe fair value of these instruments corresponds to the gains or losses that would result from the contract close-out on the valuation date; this value is recorded in “Unrealized appreciation (depreciation) on derivatives“ in the Statement of Financial Position .
Futures ContractsFutures contracts are valued at fair value and are settled daily through brokers acting as intermediaries . Any amounts receivable (payable) from the settlement of futures contracts are recorded in “Receivable (Payable) on futures contracts“ in the Statement of Financial Position .Valuation of Unlisted Securities and Other Investments When the valuation principles of the aforementioned investments are not appropriate, fair value is determined according to the Company’s best estimates, based on established valuation procedures and on prevailing market conditions on each valuation date . These procedures cover, among others, securities no longer traded, securities issued by private corporations and illiquid securities . For further information, refer to Note 3 “Critical Accounting Judgments, Estimates and Assumptions“ .
Investment TransactionsInvestment transactions are accounted for on the trade date . Cost is determined on an average cost basis except for money market securities, for which the cost is determined using the First In First Out method . The average cost does not include amortization of premiums or discounts on fixed-income securities with the exception of stripped bonds . Transaction costs, such as brokerage commissions, incurred in the purchase and sale of securities by the Funds are recognized in the Statement of Comprehensive Income . The difference between the unrealized appreciation (depreciation) of investments at the beginning and at the end of the period is included in “Net unrealized gain (loss) on investments“ in the Statement of Comprehensive Income . On disposal of an investment, the difference between the fair value and the cost of the investment is included in “Net realized gain (loss) on investments“ in the Statement of Comprehensive Income .
Offsetting Financial Assets and Financial LiabilitiesFinancial assets and liabilities are offset in the Statement of Financial Position for the Funds only when there is:• a legally enforceable and unconditional right to offset the recognized amounts and;• an intention to settle on a net amount, or to close-out the asset and settle the liability simultaneously .The Funds have a legally enforceable and unconditional right to offset a financial asset and liability when they meet the following criteria:• the right is enforceable in the normal course of business and;• the right is enforceable in the event of default, insolvency or bankruptcy .Over-the-counter derivatives, securities lending, repurchase transactions and receivable for securities sold and payable for securities purchased that are subject to master netting or similar agreements do not meet the criteria for offsetting in the Statement of Financial Position, as they give a right to a set-off that is enforceable only in the event of default, insolvency or bankruptcy . Exchange-traded derivatives traded through brokers that are also subject to master netting agreements do not meet the criteria for offsetting, as they give a right to a set-off that is only enforceable in the normal course of business .In conclusion, the Funds cannot offset the amounts in the Statement of Financial Position, as the conditions mentioned above have not been met .
Other Assets and LiabilitiesMargin deposited on derivatives, receivable on futures contracts, premiums receivable, receivable for securities sold, and interest, dividends and other receivables are classified as loans and receivables and are recorded at cost .Similarly, overdraft on margin deposited on derivatives, accrued expenses, payable on futures contracts, withdrawals payable, payable for securities purchased, interest, dividends and others payables, as well as distributions payable, are classified as financial liabilities and recorded at cost . Given their short term maturity, their carrying amount approximates their fair value .
Securities Lending and Repurchase Transactions Certain Funds may enter into securities lending and repurchase transactions through the securities lending program of the Funds’ custodian, Desjardins Trust Inc . (Trust) .The loaned securities and repurchased securities are not derecognized in the Statement of Financial Position as substantially all the risks and advantages of ownership of these securities is kept by the Company . To limit the risk that the counterparty fails to fulfill its obligations, the Funds obtain collateral, representing at least 102% of the contract amount, determined daily based on the fair value of the previous business day’s loaned securities or repurchase transactions . Securities received as collateral in securities lending transactions are not recognized in the Statement of Financial Position as substantially all the risks and advantages of ownership of
236 DFS GUARANTEED INVESTMENT FUNDS
these securities have not been transferred to the Funds . Cash guarantees received for securities lending and repurchase transactions are recognized as financial assets in “Cash guarantee received for securities lending“ and/or “Cash guarantee received for repurchase transactions“, as appropriate in the Statement of Financial Position . A liability representing the obligation to return the securities is recognized in “Commitments related to securities lending” and/or “Commitments related to repurchase transactions”, as appropriate .Revenue generated through the securities lending program is recognized at a predetermined rate . This revenue is included in “Revenue from securities lending and repurchase transactions“ in the Statement of Comprehensive Income .For further information regarding the Funds authorized to engage in repurchase and securities lending transactions, please refer to the “Notes to the Financial Statements – Specific Information“ pertaining to each Fund .
IncomeInterest for attribution purposes from investments in debt securities and presented in the Statement of Comprehensive Income is recognized as it is earned . The Funds do not amortize premiums paid or discounts received on the purchase of debt securities except for stripped bonds, which are amortized on a straight line basis . Dividends are recognized as income on the ex-dividend date . Interest and dividend distributions received from underlying funds are recorded at the date of distribution . Distributions received from income and royalty trust investments are classified as income, capital gains or return of capital based on amounts reported by the management of these trusts . If such specific information is not available, the Company will determine the split at its discretion . Foreign income is accounted for on a gross amount received and is included in the income section in the Statement of Comprehensive Income .On derivative contract close-out, the gains and losses from derivatives held for hedging purposes are included in “Net realized gain (loss) on derivatives“ in the Statement of Comprehensive Income . Gains and losses from derivatives held for purposes other than hedging are included in “Net income (loss) from derivative financial instruments“ in the Statement of Comprehensive Income .
Foreign Currency TranslationThe Funds’ premiums and withdrawals are denominated in Canadian dollars . Foreign currency assets and liabilities denominated in a foreign currency are translated into the functional currency at the exchange rate on each valuation date . Purchases and sales of securities, as well as income and expenses denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates . Foreign exchange gains and losses relating to cash are presented as “Foreign exchange gain (loss) on cash“ and those relating to other financial assets and liabilities are presented within “Net realized gain (loss) on investments“ and “Net unrealized gain (loss) on investments“ in the Statement of Comprehensive Income .
Increase (Decrease) in Net Assets per Unit from Operations Attributable to Contract Owners The increase (decrease) in net assets per unit from operations attributable to Contract Owners, presented in the Statement of Comprehensive Income is calculated by dividing the increase (decrease) in net assets from operations attributable to Contract Owners per unit by the average number of units outstanding during the period .
Taxation
Under the Income Tax Act (Canada), each Fund is treated as a segregated fund trust . The Fund’s income, as well as gains or losses realized, if any, are allocated to Contract Owners on a regular basis . In the case of interest that accumulates in a registered account, Contract Owners will not receive annual tax slips . However, any amount paid to Contract Owners or former Contract Owners may be subject to be taxed in their hands . On the other hand, interest that accumulates in a non-registered account, Contract Owners will receive an annual tax slip for any income, gains or losses allocated . Under current tax laws, Funds do not pay income taxes, with the exception of foreign tax withholdings that may apply .
In certain circumstances, to avoid double taxation to the Contract Owners, the Funds adjust the cost of the investments held to properly reflect the adjusted cost base for tax purposes .
Investment in Entities
The Funds meet the definition of IFRS 10, Consolidated Financial Statements, of investment entities and account for their investments in underlying funds at FVTPL .
According to IFRS 12, Disclosure of Interests in Other Entities, the Funds must disclose specific information on their investments in other entities, as Subsidiaries, Associates and Structured Entities .SubsidiariesAn entity, including investments in any other investment entity, is considered as a subsidiary when it is controlled by another entity . The Fund controls an entity when it is exposed to, or has the right to, variable returns from its involvement with the entity and through its power over the entity .AssociatesAssociates are investments in entities over which the Fund exercises significant influence without, however, exercising control .Structured EntitiesStructured Entities are conceived in a way that the right to vote and other similar rights are not determining factors in who exercises control . The Company has determined that its investments in underlying funds, index-based investments, asset-backed securities and mortgage-backed securities are Structured Entities, unless the specified relationship is different .
Refer to the section “Notes to the Financial Statements – Specific Information“ pertaining to each Fund for more information on these entities .
NOTES TO THE FINANCIAL STATEMENTS – unaudited (cont.)
237DFS GUARANTEED INVESTMENT FUNDS
Accounting Standards Issued but not yet AppliedIn November 2009, IFRS 9, Financial Instruments, was issued and subsequently amended in October 2010 . This was the first phase of the project on classification and measurement of financial assets and liabilities . IFRS 9 will replace IAS 39, Financial Instruments: Recognition and Measurement . IFRS 9 has been completed in three phases, including minor amendments to classification and measurement of financial assets and liabilities, impairment of financial assets, and general hedge accounting . Accounting for macro hedging has been removed from IFRS 9 and is expected to be issued as a separate standard . The effective date will be January 1, 2018 with early adoption permitted . The Manager is currently assessing the impact of the adoption of these amendments on the financial statements .
3. CRITICAL ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of financial statements requires the Management of the Company to use judgment in applying its accounting policies and to make estimates and assumptions about the future . Actual results may differ from these estimates . The following discusses the most significant accounting judgments and estimates that the Funds have made in preparing the financial statements .
Fair Value Measurement of Derivatives and Securities not Quoted in an Active Market
The Funds may hold financial instruments that are not quoted in active markets, including derivatives . Fair value is determined based on models that make maximum use of observable inputs and rely as little as possible on unobservable inputs . The Funds consider the data observable if that market data is readily available, distributed or updated on a regular basis, reliable and verifiable, not proprietary and provided by independent sources that are actively involved in the relevant market . The models used to determine fair values are validated and periodically reviewed by experienced personnel of the Company .
When no quoted prices are available, the fair value is estimated using present value or other valuation methods, which are influenced by the assumptions used concerning the amount and timing of estimated future cash flows and discount rates, which reflect varying degrees of risk, including liquidity risk, credit risk, and risks related to interest rates, exchange rates, and price and rate volatility .
The calculation of the fair values may differ given the role that judgment plays in applying the acceptable estimation and valuation techniques . Estimated fair value reflects market conditions on a given date and for this reason, it may not be representative of future fair values . Refer to Note 2, “Basis of Presentation“ for further information on fair value measurement of financial instruments .
Classification and Measurement of Investments and Application of the Fair Value Option
In classifying and measuring financial instruments held by the Funds, the Company is required to make significant judgments about whether or not the business of the Funds is to invest on a total return basis for the purpose of applying the fair value option for financial assets under IAS 39. The most significant judgment lies in determining if certain investments are held-for-trading, and whether the fair value option can be applied to those that are not . For further information on financial instruments, refer to Note 2, “Basis of Presentation“ .
4. NET ASSETS ATTRIBUTABLE TO CONTRACT OWNERS
Structure of the Funds and the Units attributedThe Funds are wholly owned assets of Desjardins Financial Security, which have been segregated from the Company’s other assets . Except for instances where the Company has acquired an interest in a Fund, the Funds’ assets may only be used to pay benefits under the Contracts .Each Fund has a series of units, which are attributed to Contracts for the purpose of determining the value of benefits to the units attributable to those Contracts . A Contract Owner acquires no direct claim on the units or assets of a Fund by purchasing a Contract but only the benefits that are provided under the Contract .Units within the same series of Funds have the same net asset value per unit . Subject to the Company’s administrative rules, Contract Owners have the right to make transactions under their Contracts such as premiums, withdrawals and switches between units of Funds . As a result of these transactions, units are attributed to and withdrawn from the Contract based on each Contract’s terms and conditions or as provided by law . Since the Contract Owner does not own units of a Fund, ownership of units cannot be sold or transferred to another party . There are no voting rights associated with the units of the Fund .
Classification of Units Attributable to Contract OwnersUnder IFRS, IAS 32, Financial Instruments: Presentation, requires that units or shares of an entity which include a contractual obligation for the issuer to repurchase or redeem them for cash or another financial asset be classified as financial liability . Since the units of the Funds do not meet the criteria in IAS 32 for classification as equity, they are presented as financial liabilities .The Funds issue series of units to Contract Owners that include a contractual obligation for the issuer to repurchase or redeem them for cash or another financial asset . These series of units attributable to Contract Owners have different characteristics and are therefore classified as financial liabilities .
Valuation of the UnitsThe units of a Fund are valued according to the administrative rules established by the Company and in accordance with the Contract and all laws and regulations applicable to the Funds .These units differ with respect to redemption charges and management fees charged to each series (See Note 5) . The net asset value per unit is determined on each market day by dividing the net assets attributable to Contract Owners by its outstanding units .
238 DFS GUARANTEED INVESTMENT FUNDS
Series of units availableThe Desjardins Financial Security Guaranteed Investment Funds Plan, the Millennia III Plan, and the Imperial Growth Plan, as well as the various Contract versions offered under each of these Plans, offers different Series providing different guarantees and provisions as well as varying Management Expense Ratios (MERs) .Series 1: This Series was offered under the Millennia III Plan through two different Contracts: the Millennia lll and Millennia lll – New Era Contracts . The Millennia III Plan was offered from November 15, 1995 to October 28, 2007 .Series 3: This Series was offered under the Millennia III Plan through two different Contracts: the Millennia lll – Classic and Millennia lll – New Era Contracts . The Millennia III Plan was offered from November 15, 1995 to October 28, 2007 .Series 5: This Series was offered under the Desjardins Financial Security Guaranteed Investment Funds Plan through the Helios Contract . The Desjardins Financial Security Guaranteed Investment Funds Plan was first offered starting on October 29, 2007 and currently, the only Contract available is the Helios2 Contract .Series 6: This Series is offered under the Desjardins Financial Security Guaranteed Investment Funds Plan through the Helios2 Contract . The Desjardins Financial Security Guaranteed Investment Funds Plan was first offered starting on October 29, 2007 and currently, the only Contract available is the Helios2 Contract .Series 7: This Series is offered under the Desjardins Financial Security Guaranteed Investment Funds Plan through the Helios2 Contract . The Desjardins Financial Security Guaranteed Investment Funds Plan was first offered starting on October 29, 2007 and currently, the only Contract available is the Helios2 Contract .Series IGP: This Series was offered under the Imperial Growth Plan through the three remaining Contracts (C71, C81, and C88) . The Imperial Growth Plan was offered pre-1995 .
Number of UnitsThe number of units outstanding in each Fund as at June 30, 2015 and 2014 and the number of units attributed to and withdrawn from Contracts during each period are as follows:
Outstanding Units Attributed Units Withdrawn Units2015 2014 2015 2014 2015 2014
INVESTMENT SOLUTIONSConservative – Multi-managers
Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,030,128 145,592 556,231 145,903 76,389 311Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116,254 200 114,197 200 1,861 —
Moderate – Multi-managersSeries 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,683,835 281,040 825,828 282,319 108,804 1,279Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62,666 200 176 200 — —
Balanced – Multi-managersSeries 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,883,075 460,616 1,243,279 464,571 62,865 3,955Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220,391 200 110,083 200 28,869 —
Growth – Multi-managersSeries 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,793,394 338,342 957,026 338,982 74,382 640Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96,206 200 2,650 200 544 —
Maximum Growth – Multi-managersSeries 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 276,722 92,404 96,680 92,611 12,100 207Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,854 200 — 200 — —
INDIVIDUAL FUNDS Income Money Market
Series 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,332 91,620 90 147 10,442 5,000Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 470,468 609,351 69,454 105,267 49,698 97,944Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,740,578 3,475,028 615,655 754,584 849,957 974,970Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 958,703 170,674 937,180 263,983 303,672 93,309Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168,885 360 195,972 33,637 194,544 33,277Series IGP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168,300 — 18,985 — 36,035 —
Income – Beutel Goodman Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 589,218 684,422 19,734 12,417 61,700 85,969Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,995,863 5,901,328 208,938 304,171 785,417 791,534Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 467,182 143,849 213,294 150,367 65,243 6,518Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,174 200 25,049 200 3,501 —
NOTES TO THE FINANCIAL STATEMENTS – unaudited (cont.)
239DFS GUARANTEED INVESTMENT FUNDS
Outstanding Units Attributed Units Withdrawn Units2015 2014 2015 2014 2015 2014
Income – Fiera Series 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287,760 340,917 4,190 20,276 17,526 50,858Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 716,079 892,434 36,906 32,485 107,066 173,613Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,112,588 9,315,273 282,085 336,776 806,183 2,055,102Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 740,554 97,904 323,606 100,699 64,581 2,795Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,771 200 17,543 200 131 —
Balanced and Asset Allocation Diversified Income – Quotential
Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 897,027 969,050 77,594 139,835 110,811 194,086Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,904,178 24,355,016 1,125,554 1,307,389 2,105,696 2,128,978Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,633,077 345,218 1,287,564 348,468 148,142 3,250Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135,513 200 112,373 200 160 —
Balanced Income – Quotential Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,530,408 1,692,419 88,912 129,177 175,438 239,365Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,318,029 36,925,414 1,509,426 1,279,821 2,883,100 2,105,669Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,516,437 331,636 660,509 334,005 37,178 2,369Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394,601 102,317 106,074 102,479 3,556 162
Canadian Balanced – Fidelity Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,146,291 1,157,398 131,679 128,630 117,493 123,420Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93,265,987 99,438,117 4,452,320 2,914,338 7,475,089 6,713,802Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,747,466 611,830 1,729,630 615,728 464,280 3,898Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115,646 200 39,890 200 1,042 —
Canadian Balanced – Fiera Series 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 878,930 1,043,883 6,128 18,953 94,002 87,968Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,768,615 2,010,049 67,851 45,556 164,965 264,094Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,218,178 15,414,201 461,203 341,315 1,230,791 1,156,701Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 815,983 52,687 500,386 52,763 30,638 76Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95,690 200 36,471 200 915 —
Canadian Balanced – Bissett Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,084,208 1,304,367 39,026 191,656 164,114 272,331Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,563,062 28,655,510 817,842 2,794,760 3,140,031 1,659,276Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,236,803 675,989 1,294,923 677,220 394,379 1,231Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420,125 48,319 185,051 48,463 15,762 144
Balanced Growth – Quotential Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,059,313 2,394,696 119,721 83,527 241,716 161,391Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78,091,352 82,791,216 3,127,836 2,105,533 5,670,090 3,699,194Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,857,135 731,774 1,372,259 733,153 102,946 1,379Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138,655 200 53,461 200 870 —
Canadian Balanced – CI SignatureSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,572,606 13,124,472 1,572,463 562,324 1,041,937 806,300Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,990,194 206,856 1,601,972 209,801 195,308 2,945Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235,145 200 123,129 200 7,566 —
Balanced – Ethical Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,336,703 1,400,372 59,156 71,849 71,341 185,379Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132,995 23,827 107,122 23,857 26,818 30Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,861 200 — 200 — —
Income and Growth – CI SignatureSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,482,858 7,871,415 1,032,579 1,118,169 782,050 290,247Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,575,219 249,628 1,481,505 250,784 111,430 1,156Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160,454 33,725 74,367 33,725 7,154 —
Growth and Income – Northwest Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 475,641 519,868 18,132 52,462 57,677 33,378Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,433,388 25,118,776 782,603 1,691,965 2,003,618 1,245,485Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,668,694 284,623 751,504 287,877 205,678 3,254Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101,153 200 16,460 200 700 —
Global Growth – Northwest Select Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 574,366 686,674 11,723 13,535 53,464 130,304Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,941,339 9,238,039 448,619 359,260 511,719 416,832
240 DFS GUARANTEED INVESTMENT FUNDS
Outstanding Units Attributed Units Withdrawn Units2015 2014 2015 2014 2015 2014
Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,025,238 111,329 566,636 111,520 26,726 191Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,106 200 16,821 200 708 —
Global Balanced – Jarislowsky Fraser Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,053,668 1,150,815 81,575 74,208 94,367 186,239Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,240,212 18,823,371 1,385,634 1,291,918 1,487,572 1,187,562
Canadian Asset Allocation – CI CambridgeSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 845,968 815,817 120,007 334,495 94,026 66,338Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 486,828 97,914 268,747 98,533 23,808 619Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,203 200 356 200 — —
Growth – Quotential Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 497,872 598,996 12,171 60,678 61,219 106,670Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,249,569 10,136,916 129,472 258,215 553,014 468,941Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319,340 13,353 240,360 13,367 31,840 14Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,455 200 558 200 — —
Global High Income – Multi-managers Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322,211 357,340 76,772 51,369 103,978 90,474Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,153,441 3,255,405 246,209 293,964 290,540 157,587Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298,192 50,424 123,262 50,593 20,592 169Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,143 200 358 200 — —
Canadian Equity Dividend Income – Bissett
Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,471,360 2,843,575 74,993 142,085 332,146 470,395Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,309,592 9,349,794 363,862 788,142 1,220,709 667,734Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 991,509 304,507 255,035 307,151 96,975 2,644Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92,797 75,996 20,978 76,138 41,171 142
Canadian Dividend – Fiera Series 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408,139 478,515 2,392 42,792 42,128 74,021Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,750,388 2,051,040 31,741 37,454 207,875 228,468Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,154,695 9,280,975 134,151 146,490 832,423 795,710Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176,657 33,962 92,410 34,187 17,151 225Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,958 200 — 200 — —
Canadian Dividend – NorthwestSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,516,978 2,280,384 527,317 647,984 385,178 224,765Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341,269 46,618 161,584 46,677 24,351 59Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,864 40,237 — 40,237 — —
Canadian Equity – Fidelity True North®
Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112,599 98,147 28,103 18,324 17,476 23,679Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,173,575 2,252,264 202,818 255,693 254,669 200,017Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 927,118 119,366 576,622 124,968 122,092 5,602Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83,180 200 69,063 200 588 —
Canadian Equity – Bissett Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,547,399 1,797,438 40,393 66,154 191,887 195,840Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,240,536 1,383,578 64,621 248,086 191,546 85,832Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465,905 136,525 129,329 138,246 98,000 1,721Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,866 200 122 200 1 —
Canadian Equity – Fiera Series 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,409,536 1,631,096 19,206 10,979 120,756 149,728Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,173,232 1,350,440 24,503 25,667 121,480 127,785Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427,238 466,604 21,494 21,782 43,699 47,540Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83,109 23,752 43,059 23,838 6,452 86Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,311 200 — 200 356 —Series IGP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377,145 — 947 — 100,292 —
Canadian Equity – Jarislowsky Fraser Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 765,030 975,069 13,697 21,364 112,765 98,689Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,384,677 26,045,909 218,674 339,838 2,059,575 1,419,554
NOTES TO THE FINANCIAL STATEMENTS – unaudited (cont.)
241DFS GUARANTEED INVESTMENT FUNDS
Outstanding Units Attributed Units Withdrawn Units2015 2014 2015 2014 2015 2014
Specialty Equity – NorthwestSeries 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 617,035 746,760 11,246 15,273 92,592 72,819Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,051,139 2,419,060 214,321 180,235 480,108 272,217Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193,529 25,445 94,655 25,474 34,441 29Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,054 200 — 200 — —
Small Cap – Bissett Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 531,398 658,606 6,704 24,690 82,763 75,936Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 635,678 790,296 39,555 166,311 142,995 59,602Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 384,526 84,901 136,653 86,419 83,349 1,518Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,172 18,788 139 18,788 18,526 —
Foreign EquityAmerican Equity – MFS
Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 681,682 785,221 36,421 49,100 108,615 79,346Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,453,389 1,273,742 312,475 272,014 131,286 91,924Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418,187 105,699 252,396 106,045 16,434 346Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,229 200 18,347 200 — —
American Equity Value – DesjardinsSeries 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318,598 335,708 17,601 18,481 15,620 16,932Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 368,851 384,817 43,676 15,457 61,097 27,117Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,330,455 963,919 383,321 289,482 116,918 51,958Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 472,978 60,604 310,407 60,674 31,259 70Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,101 14,820 46,576 14,820 5,310 —
Global Dividend – DesjardinsSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,044,820 761,886 327,702 298,433 128,944 44,980Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 663,894 93,482 368,453 94,990 35,484 1,508Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,052 200 35,497 200 3,227 —
Global Equity – MFS Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,444 42,688 10,086 3,747 2,717 1,281Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,585,406 5,852,657 61,317 91,934 239,729 239,011Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,142 4,854 62,809 4,860 514 6Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,940 200 — 200 — —
Global – Fidelity Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345,277 392,245 31,050 15,990 53,155 45,407Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,277,398 4,551,874 217,734 216,998 442,233 219,678
International Equity – MFSSeries 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351,582 378,961 11,668 7,487 21,369 18,764Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 823,862 985,106 30,272 28,283 140,134 119,981Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 583,974 619,959 71,810 43,610 81,528 69,994Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49,298 2,545 46,414 2,546 48 1Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,532 200 10,175 200 — —
International Equity Growth – DesjardinsSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190,615 158,813 25,450 40,641 14,402 13,642Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136,782 39,100 33,057 39,122 13,456 22Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,150 200 — 200 — —
5. MANAGEMENT FEES AND OTHER EXPENSES
Management feesIn return for investment management, Desjardins Financial Security is paid a management fee from the Funds based on the net asset value of the Funds’ units attributable to each series of units and calculated daily .The management fees, as a percentage of the daily average net assets, are as follows:
242 DFS GUARANTEED INVESTMENT FUNDS
Series 1 Series 3 Series 5 Series 6 Series 7 Series IGP% % % % % %
INVESTMENT SOLUTIONSConservative – Multi-managers — — — 1 .95 1 .50 —Moderate – Multi-managers — — — 2 .00 1 .55 —Balanced – Multi-managers — — — 2 .00 1 .55 —Growth – Multi-managers — — — 2 .05 1 .60 —Maximum Growth – Multi-managers — — — 2 .05 1 .60 —
INDIVIDUAL FUNDSIncomeMoney Market 0 .75 0 .75 0 .75 0 .80 0 .35 1 .30Income – Beutel Goodman — 1 .82 1 .05 1 .35 0 .90 —Income – Fiera 1 .50 1 .38 1 .09 1 .35 0 .90 —Balanced and Asset AllocationDiversified Income – Quotential — 1 .90 1 .96 2 .20 1 .75 —Balanced Income – Quotential — 1 .90 1 .96 2 .15 1 .70 —Canadian Balanced – Fidelity — 2 .02 2 .02 2 .20 1 .75 —Canadian Balanced – Fiera 2 .00 1 .65 1 .68 2 .00 1 .55 —Canadian Balanced – Bissett — 1 .95 1 .75 2 .00 1 .55 —Balanced Growth – Quotential — 1 .90 1 .96 2 .15 1 .70 —Canadian Balanced – CI Signature — — 1 .89 2 .15 1 .70 —Balanced – Ethical — — 1 .88 2 .20 1 .75 —Income and Growth – CI Signature — — 2 .20 2 .20 1 .75 —Growth and Income – Northwest — 2 .22 2 .03 2 .20 1 .75 —Global Growth – Northwest Select — 2 .33 2 .10 2 .30 1 .85 —Global Balanced – Jarislowsky Fraser — 2 .10 1 .69 — — —Canadian Asset Allocation – CI Cambridge — — 2 .20 2 .05 1 .60 —Growth – Quotential — 2 .15 2 .21 2 .20 1 .75 —Global High Income – Multi-managers — 1 .70 1 .96 2 .10 1 .65 —Canadian EquityDividend Income – Bissett — 2 .06 1 .75 2 .15 1 .70 —Canadian Dividend – Fiera 1 .50 1 .13 1 .59 2 .05 1 .60 —Canadian Dividend – Northwest — — 2 .20 2 .15 1 .70 —Canadian Equity – Fidelity True North ® — 2 .02 2 .02 2 .25 1 .80 —Canadian Equity – Bissett — 2 .18 1 .75 2 .10 1 .65 —Canadian Equity – Fiera 2 .00 1 .63 1 .59 1 .95 1 .50 1 .80Canadian Equity – Jarislowsky Fraser — 2 .15 1 .69 — — —Specialty Equity – Northwest — 2 .35 2 .16 2 .40 1 .95 —Small Cap – Bissett — 2 .25 2 .01 2 .40 1 .95 —Foreign EquityAmerican Equity – MFS — 2 .25 1 .71 2 .15 1 .70 —American Equity Value – Desjardins 2 .00 1 .69 2 .06 2 .10 1 .65 —Global Dividend – Desjardins — — 2 .20 2 .20 1 .75 —Global Equity – MFS — 1 .78 1 .78 2 .25 1 .80 —Global – Fidelity — 2 .30 2 .23 — — —International Equity – MFS 2 .00 1 .95 1 .69 2 .25 1 .80 —International Equity Growth – Desjardins — — 2 .20 2 .20 1 .75 —
Operating expensesIn addition to management fees, a charge is applied to each Fund for operating and administrative expenses relating to the Fund . Each Fund is also responsible for all applicable taxes, including Goods and Services Tax (“GST“) and Harmonized Sales Tax (“HST“) if any, and all brokerage commissions incurred by a Fund in buying and selling investments on behalf of a Fund .
NOTES TO THE FINANCIAL STATEMENTS – unaudited (cont.)
243DFS GUARANTEED INVESTMENT FUNDS
Management Expense RatiosSome expenses (audit fees, legal fees, custodial fees, marketing costs, etc . ) have been absorbed by the Company . Management expense ratios for all the Funds would be nine basis points higher if these expenses had been charged to the Funds . The Company does not intend to change its method of allocating costs .The management expense ratios for the period ended June 30, 2015 and for each of the past five years, which includes management, guarantee and operating expenses, are as follows*:
June 30 2015
December 31 2014
December 31 2013
December 31 2012
December 31 2011
December 31 2010
% % % % % %INVESTMENT SOLUTIONSConservative – Multi-managers
Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4900 2 .5100** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.0100 2 .0100** — — — —
Moderate – Multi-managersSeries 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5100 2 .5400** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.9000 2 .0700** — — — —
Balanced – Multi-managersSeries 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5700 2 .5700** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1300 2 .1300** — — — —
Growth – Multi-managersSeries 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6800 2 .6800** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1800 2 .1800** — — — —
Maximum Growth – Multi-managersSeries 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7100 2 .7100** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2400 2 .2400** — — — —
INDIVIDUAL FUNDSIncomeMoney Market***
Series 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7200 1 .7200 1 .7200 1 .5500 1 .5500 1 .5500Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7200 1 .7300 1 .7200 1 .5500 1 .5500 1 .5500Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3900 1 .3900 1 .4000 1 .2500 1 .2500 1 .2500Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1000 1 .1100** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.6300 0 .6300** — — — —Series IGP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6600 1 .6700** — — — —
Income – Beutel Goodman***Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8600 2 .8700 2 .8600 2 .5500 2 .5500 2 .5500Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.9600 1 .9700 1 .9700 1 .7500 1 .7500 1 .7500Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7500 1 .7500** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3200 1 .3200** — — — —
Income – Fiera Series 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9300 2 .9400 2 .9300 2 .6500 2 .6500 2 .6500Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6100 2 .6200 2 .6100 2 .3300 2 .3300 2 .3300Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.9600 1 .9600 1 .9500 1 .7500 1 .7500 1 .7500Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7900 1 .8000** — — — — Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3100 1 .3200** — — — —
Balanced and Asset AllocationDiversified Income – Quotential
Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1300 3 .1400 3 .1500 2 .8000 2 .8000 2 .8000Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9200 2 .9200 2 .9200 2 .6000 2 .6000 2 .6000Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6800 2 .7200** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2700 2 .3000** — — — —
Balanced Income – QuotentialSeries 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2000 3 .2000 3 .2000 2 .8500 2 .8500 2 .8500Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9500 2 .9500 2 .9400 2 .6000 2 .6000 2 .6000
244 DFS GUARANTEED INVESTMENT FUNDS
June 30 2015
December 31 2014
December 31 2013
December 31 2012
December 31 2011
December 31 2010
% % % % % %Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7500 2 .7400** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3000 2 .3000** — — — —
Canadian Balanced – FidelitySeries 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4100 3 .4100 3 .4000 3 .0000 3 .0000 3 .0000Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9600 2 .9600 2 .9600 2 .6500 2 .6500 2 .6500Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8200 2 .8300** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3400 2 .3600** — — — —
Canadian Balanced – Fiera***Series 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8300 3 .8200 3 .8200 3 .4000 3 .4000 3 .4000Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2000 3 .1900 3 .1900 2 .8500 2 .8500 2 .8500Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5500 2 .5500 2 .5500 2 .3000 2 .3000 2 .3000Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5900 2 .6000** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1200 2 .1300** — — — —
Canadian Balanced – Bissett Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1700 3 .1900 3 .1800 2 .8500 2 .8500 2 .8500Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7700 2 .7700 2 .7700 2 .5000 2 .5000 2 .5000Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5900 2 .6100** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1000 2 .0000** — — — —
Balanced Growth – QuotentialSeries 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2700 3 .2700 3 .2900 2 .9500 2 .9500 2 .9500Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9700 2 .9700 2 .9700 2 .6500 2 .6500 2 .6500Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7900 2 .8000** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3600 2 .3600** — — — —
Canadian Balanced – CI SignatureSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9900 2 .9900 2 .9900 2 .6800 2 .6800 2 .6800**Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7800 2 .7700** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3400 2 .3600** — — — —
Balanced – Ethical Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9500 2 .9500 2 .9600 2 .6800 2 .6800 2 .6800**Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7900 2 .8700** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3600 2 .3600** — — — —
Income and Growth – CI SignatureSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0500 3 .0700 3 .0700 2 .7500** — —Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8500 2 .8400** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3200 2 .4700** — — — —
Growth and Income – Northwest Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.6400 3 .6400 3 .6400 3 .2200 3 .2200 3 .2200Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9400 2 .9400 2 .9400 2 .6500 2 .6500 2 .6500Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8700 2 .8600** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4100 2 .4100** — — — —
Global Growth – Northwest Select Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8500 3 .8500 3 .8600 3 .4300 3 .4300 3 .4300Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1200 3 .1200 3 .1200 2 .8000 2 .8000 2 .8000Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9800 3 .0200** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5900 2 .5900** — — — —
Global Balanced – Jarislowsky Fraser Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4000 3 .4000 3 .4000 3 .0000 3 .0000 3 .0000Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8500 2 .8600 2 .8600 2 .5500 2 .5500 2 .5500
Canadian Asset Allocation – CI CambridgeSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8900 2 .9100 2 .9500 2 .6500** — —Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6800 2 .6900** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3000 2 .3000** — — — —
Growth – QuotentialSeries 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.6100 3 .6200 3 .6100 3 .2000 3 .2000 3 .2000Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2200 3 .2100 3 .2100 2 .8500 2 .8500 2 .8500
NOTES TO THE FINANCIAL STATEMENTS – unaudited (cont.)
245DFS GUARANTEED INVESTMENT FUNDS
June 30 2015
December 31 2014
December 31 2013
December 31 2012
December 31 2011
December 31 2010
% % % % % %Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9200 2 .9300** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4700 2 .4700** — — — —
Global High Income – Multi-managers Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0600 3 .0600 3 .0700 2 .7000 2 .7000 2 .7000Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7500 2 .7500 2 .7500 2 .4500 2 .4500 2 .4500Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7000 2 .7800** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3600 2 .3600** — — — —
Canadian EquityDividend Income – Bissett
Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3900 3 .3900 3 .3900 3 .0500 3 .0500 3 .0500Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9300 2 .9400 2 .9400 2 .6500 2 .6500 2 .6500Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7000 2 .7200** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1300 2 .1000** — — — —
Canadian Dividend – Fiera Series 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2500 3 .2500 3 .2500 2 .9200 2 .9200 2 .9200Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6000 2 .6000 2 .6100 2 .3500 2 .3500 2 .3500Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4400 2 .4400 2 .4400 2 .2000 2 .2000 2 .2000Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6200 2 .6300** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2400 2 .2400** — — — —
Canadian Dividend – NorthwestSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0800 3 .0800 3 .0900 2 .7000** — —Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8500 2 .9000** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4100 2 .4100** — — — —
Canadian Equity – Fidelity True North®
Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5900 3 .6200 3 .6200 3 .2000 3 .2000 3 .2000Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2000 3 .2100 3 .2000 2 .8500 2 .8500 2 .8500Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0500 3 .0400** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5800 2 .5900** — — — —
Canadian Equity – BissettSeries 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5900 3 .5900 3 .5900 3 .2000 3 .2000 3 .2000Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9700 2 .9800 2 .9800 2 .7000 2 .7000 2 .7000Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7900 2 .8300** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4100 2 .4100** — — — —
Canadian Equity – Fiera Series 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8200 3 .8200 3 .8200 3 .4200 3 .4200 3 .4200Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1800 3 .1800 3 .1700 2 .8500 2 .8500 2 .8500Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5400 2 .5400 2 .5400 2 .3000 2 .3000 2 .3000Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6700 2 .6700** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2400 2 .2400** — — — —Series IGP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1700 2 .2200** — — — —
Canadian Equity – Jarislowsky Fraser Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5800 3 .5900 3 .5900 3 .2000 3 .2000 3 .2000Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9100 2 .9200 2 .9100 2 .6000 2 .6000 2 .6000
Specialty Equity – Northwest Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8300 3 .8300 3 .8300 3 .4000 3 .4000 3 .4000Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2700 3 .2800 3 .2900 2 .9000 2 .9000 2 .9000Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2100 3 .2400** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7600 2 .7600** — — — —
Small Cap – BissettSeries 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7400 3 .7500 3 .7500 3 .3700 3 .3700 3 .3700Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1300 3 .1300 3 .1300 2 .8500 2 .8500 2 .8500Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1200 3 .1500** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5600 2 .7600** — — — —
246 DFS GUARANTEED INVESTMENT FUNDS
June 30 2015
December 31 2014
December 31 2013
December 31 2012
December 31 2011
December 31 2010
% % % % % %Foreign EquityAmerican Equity – MFS***
Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7600 3 .7700 3 .7600 3 .3400 3 .3400 3 .3400Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9300 2 .9400 2 .9700 2 .6500 2 .6500 2 .6500Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8800 2 .8700** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4700 2 .4700** — — — —
American Equity Value – DesjardinsSeries 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8100 3 .8200 3 .8200 3 .4100 3 .4100 3 .4100Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2300 3 .2400 3 .2400 2 .9000 2 .9000 2 .9000Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0600 3 .0700 3 .0800 2 .7500 2 .7500 2 .7500Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7900 2 .7600** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2500 2 .4100** — — — —
Global Dividend – DesjardinsSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7900 2 .7800 2 .9000 2 .5500** — —Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8300 2 .8600** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4700 2 .4700** — — — —
Global Equity – MFS***Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3900 3 .3900 3 .4700 3 .0500 3 .0500 3 .0500Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9200 2 .9200 2 .9200 2 .6000 2 .6000 2 .6000Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9500 3 .0000** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5300 2 .5300** — — — —
Global – Fidelity Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7600 3 .7600 3 .7700 3 .4000 3 .4000 3 .4000Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2700 3 .2700 3 .2800 2 .9500 2 .9500 2 .9500
International Equity – MFS***Series 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8300 3 .8500 3 .8500 3 .5000 3 .5000 3 .5000Series 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.6400 3 .6500 3 .6500 3 .2500 3 .2500 3 .2500Series 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7600 2 .7600 2 .7700 2 .4500 2 .4500 2 .4500Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0500 3 .0300** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5900 2 .5900** — — — —
International Equity Growth – DesjardinsSeries 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1100 3 .1000 3 .2200 2 .8000** — —Series 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9200 2 .9400** — — — —Series 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5300 2 .5300** — — — —
* Starting in 2013, management expense ratios include all applicable sales taxes (sales taxes not included before 2013) .** Annualized . *** The management expense ratios for these Funds include underlying fund managers’ fees, ranging from 0 .01 to 0 .05% .
6. RELATED PARTY TRANSACTIONSThe Funds pay management fees to the Company, which are presented in the Statement of Comprehensive Income . Those fees are calculated on a daily basis with the net asset value of the Fund and paid monthly at the annual rate specified in Note 5 .Some Funds have investments in underlying funds from related parties .As at June 30, 2015 and December 31, 2014, the Company had the following seed capital investments:
June 30, 2015 December 31, 2014$ $
Conservative – Multi-managers 141,426 139,434 Moderate – Multi-managers 169,539 166,098 Balanced – Multi-managers 197,576 192,131 Growth – Multi-managers 227,983 220,331 Maximum Growth – Multi-managers 256,239 245,692
NOTES TO THE FINANCIAL STATEMENTS – unaudited (cont.)
247DFS GUARANTEED INVESTMENT FUNDS
June 30, 2015 December 31, 2014$ $
Money Market 54,224 54,250 Income – Beutel Goodman 31,786 31,814 Income – Fiera 41,734 41,425 Diversified Income – Quotential 30,213 29,420 Balanced Income – Quotential 27,767 26,440 Canadian Balanced – Fidelity 37,472 35,477 Canadian Balanced – Fiera 39,780 38,354 Canadian Balanced – Bissett 130,110 129,086 Balanced Growth – Quotential 26,002 24,518 Canadian Balanced – CI Signature 231,244 227,133 Balanced – Ethical 186,804 184,848 Income and Growth – CI Signature 217,407 212,195 Growth and Income – Northwest 266,785 259,529 Global Growth – Northwest Select 30,128 28,721 Canadian Asset Allocation – CI Cambridge 232,039 223,803 Growth – Quotential 24,740 23,032 Global High Income – Multi-managers 278,598 278,126 Dividend Income – Bissett 44,515 45,911 Canadian Dividend – Fiera 38,934 40,888 Canadian Dividend – Northwest 240,966 242,009 Canadian Equity – Fidelity True North ® 157,017 155,445 Canadian Equity – Bissett 44,398 45,719 Canadian Equity – Fiera 84,215 81,710 Specialty Equity – Northwest 285,959 284,620 Small Cap – Bissett 68,672 70,727 American Equity – MFS 25,725 23,878 American Equity Value – Desjardins 763,208 718,756 Global Dividend – Desjardins 260,242 250,239 Global Equity – MFS 226,428 205,012 International Equity – MFS 26,873 23,122 International Equity Growth – Desjardins 276,185 244,116
The related parties transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties .
7. FINANCIAL INSTRUMENTS DISCLOSURES
DFS Preliminary Information The net assets of the DFS Guaranteed Investment Funds are held by the Company on behalf of all Contract Owners . These Funds are not separate legal entities . The Contract Owners do not own any of the assets of the Funds nor own an interest in the Funds . However, the financial instrument risks resulting from the Funds are assumed by the Contract Owners . The segregated fund’s value may increase or decrease according to market fluctuations .Moreover, the Funds are offered with a deposit guarantee of 75 to 100% that protects the deposits until specific maturity dates .For the Fund of funds, details regarding the top holdings of the underlying fund(s) are shown in the appendix of the Schedule of Investment Portfolio .
Hierarchy of Financial Instruments at Fair ValueThe fair value measurement of financial instruments is determined using the following three levels of the fair value hierarchy:• Level 1 – Measurement based on quoted prices (unadjusted) in active markets for identical assets or liabilities;• Level 2 – Valuation techniques based primarily on observable market data;• Level 3 – Valuation techniques not based primarily on observable market data .If inputs of different levels are used to measure the fair value of an asset or liability, the classification within the hierarchy is based on the lowest level input that is significant to the fair value measurement .
248 DFS GUARANTEED INVESTMENT FUNDS
Measurement MonitoringThe Company is responsible for establishing the fair value measurements included in the Funds’ financial statements, including Level 3 measurements . The Company obtains prices from a pricing agency, monitors and analyzes these prices on a daily basis . A measurement monitoring committee established by the Company ensures that appropriate operating procedures and a proper monitoring structure are in place and followed . Monthly monitoring reports are prepared and sent to each member for approval . The measurement monitoring committee verifies the measurements on a monthly basis . On a quarterly basis, this committee examines and approves the Level 3 measurements after obtaining confirmation of the measurements from each portfolio manager, as needed . The committee signs off on any adjustments made to prices or estimates provided by the pricing agency .
Classification within the Fair Value Hierarchy A change in the fair value measurement method could result in a transfer between levels . The Funds’ policy is to record the impacts of transfers between levels on the date of the event or change in circumstances behind the transfer .The following types of investments may be classified Level 3 if their prices are no longer based on observable inputs .
a) Money Market SecuritiesMoney market securities primarily include public sector and corporate securities, which are valued using models with inputs including interest rate curves, credit spreads and volatilities . The inputs that are significant to valuation are generally observable . Public sector money market securities guaranteed by the federal and provincial government have been classified as Level 1 . Other money market securities have been classified as Level 2 .
b) EquitiesEquities are classified as Level 1 when the security is actively traded and a reliable price is observable . Certain equities do not trade frequently and therefore observable prices may not be available . In such cases, fair value is determined using observable market data and the fair value is classified as Level 2, unless the determination of fair value requires significant unobservable data, in which case the measurement is classified as Level 3 . Unlisted warrants are generally classified as Level 2 .
c) Index-Based InvestmentsIndex-based Investments are classified as Level 1 when the security is actively traded and a reliable price is observable .
d) BondsPublic sector bonds guaranteed by the federal and provincial government are classified as Level 1 . Corporate bonds, which are valued using models with inputs including interest rate curves, credit spreads and volatilities are usually classified as Level 2 .
e) Mortgage-backed Securities and Asset-backed SecuritiesMortgage-backed securities and asset-backed securities consist primarily of corporate securities, which are valued using models with inputs including interest rate curves, credit spreads and volatilities . Since the inputs that are significant to valuation are generally observable, mortgage-backed securities and asset-backed securities are usually classified as Level 2 .
f) Investment FundsPublic investment funds are classified as Level 1 when their prospectus is unrestricted and their price is reliable and observable . Since some investment funds are not public, their price is determined using observable market data and fair value is classified as Level 2, unless the measurement of fair value requires the use of significant unobservable inputs, in which case it is classified as Level 3 .
g) Derivative Financial InstrumentsDerivative instruments consist of foreign currency forward contracts for which counterparty credit spreads are observable and reliable or for which the credit-related inputs are determined to be significant to fair value, are classified as Level 2 .Detailed information concerning the fair value hierarchy of each Fund is available in their respective “Notes to the Financial Statements – Specific Information“ . For securities classified as Level 3, the valuation techniques and assumptions are also presented in their respective “Notes to the Financial Statements – Specific Information“ .
Management of Risks Arising from Financial Instruments During the course of their activities, the Funds are exposed to a variety of risks associated with financial instruments such as market risk (including currency risk, interest rate risk and price risk), concentration risk, credit risk and liquidity risk . The overall strategy of the Funds’ risk management focuses on the unpredictability of financial markets and optimizes the Funds’ financial performance, in accordance with the risk level established for the Fund . Most investments involve a risk of loss .For the purpose of the financial statements, certain risks detailed in the Contract and Information Folder are associated with other risks . The market risk, the special equity risk and the sovereign risk are presented under price risk . The credit risk and the derivatives risk are presented under credit risk .In accordance with the Funds’ investment policy, the Company monitors the Funds’ risks on a quarterly basis .
Market RiskMarket risk is the risk that the fair value or cash flows associated with a financial instrument will fluctuate because of a change in the relevant risk variables, such as interest rates and equity prices . The Funds’ market risk is managed through diversification of the investment portfolio’s exposure ratio . The return on investments held by the Funds is monitored by the Company on a monthly basis and reviewed by the investment committee on a quarterly basis .
NOTES TO THE FINANCIAL STATEMENTS – unaudited (cont.)
249DFS GUARANTEED INVESTMENT FUNDS
Currency RiskCurrency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate as a result of changes in foreign exchange rates . Currency risk is composed of monetary items (usually including cash, receivable amounts in foreign currency, and investments in fixed-income and money market securities) and non-monetary items (usually including investments in equities and investment funds) . The non-monetary assets are classified according to the currency of which the security was purchased .The Funds are exposed to the currency risk in holding assets and/or liabilities denominated in currencies other than the Canadian dollar, the Funds’ functional currency, as the value of the securities denominated in other currencies will fluctuate according to the prevailing exchange rates . The Funds may enter into foreign currency forward contracts to reduce their exposure to currency risk .The Funds’ exposure to currency risk is shown based on the carrying value of financial assets and financial liabilities (including the notional amount of foreign currency forward contracts and foreign currency futures, if any) . If the Canadian dollar decreases in relation to foreign currencies, the value of foreign investments increases . Conversely, if the value of the Canadian dollar increases, the value of foreign investments decreases .
Interest Rate RiskInterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate as a result of changes in market interest rates .Interest rate risk occurs when an investment fund invests in interest-bearing financial instruments . Generally, the value of these securities increases if interest rates decrease, and decreases if interest rates increase . The Company manages this risk by calculating and monitoring the average effective duration of the portfolio of these securities . The Funds hold a limited amount of cash subject to variable interest rates, which expose them to cash flow interest rate risk .
Price RiskPrice risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate as a result of changes in market prices, other than those arising from currency risk or interest rate risk .The Company manages this risk by carefully selecting securities and other financial instruments, in accordance with defined limits . The maximum risk resulting from financial instruments is determined by the fair value or contract value of the financial instruments . The Funds’ overall market positions are monitored on a monthly basis by the Company and reviewed on a quarterly basis by the investment committee . The Funds’ financial instruments are exposed to price risk arising from uncertainties about the future prices of instruments .
Concentration RiskConcentration risk arises as a result of the concentration of exposures within the same category, whether it is geographical location or industry sector . For Funds with an international investment strategy, the concentration by geographic location will be presented according to, among other things, the country of incorporation or region . For Funds with a domestic investment strategy, the concentration by industry sector will be presented according to, among other things, their investments in finance, healthcare or energy sectors, etc .
Credit RiskCredit risk is the risk that the financial instrument counterparty will be unable to pay the full amount maturity .
Financial Instrument TransactionsThe Funds are exposed to credit risk . The Funds’ and counterparty’s respective credit risk are taken into account when determining the fair value of financial assets and liabilities . Transactions are settled or paid on delivery using approved brokers . The risk of default is considered limited as delivery of the securities sold is made once the broker has received payment . Payment is made on a purchase once the securities have been received by the broker . The trade will fail if either party fails to meet its obligations . However, there are risks involved in dealing with custodians or prime brokers who settle trades and, in rare circumstances, the securities and other assets deposited with the custodian or broker may be exposed to credit risk with regard to such parties . In addition, there may be practical problems or time delays associated with enforcing the Funds’ rights to their assets in the case of an insolvency of any such party .Derivative financial instruments are financial contracts whose value depends on underlying assets, including interest rates and foreign exchange rates . The vast majority of derivative financial instruments is negotiated by mutual agreement between the Funds and its counterparties, and include foreign currency forward contracts, swaps and options . Other transactions are carried out as part of trades and mainly consist of futures contracts .
Securities Lending and Repurchase TransactionsSecurities lending and repurchase transactions expose the Funds to credit risk . These transactions are governed by Investment Industry Regulatory Organization of Canada participation agreements . The Funds also use netting agreements with counterparties to mitigate credit risk and require a percentage of collateralization (a pledge) on these transactions . The Funds only accept pledges from counterparties that comply with the eligibility criteria defined in their policies . These criteria promote quick realization, if necessary, of collateral in case of default . The collateral received and given by the Funds are mainly cash and government securities . Further information on assets pledged and received as collateral is presented in the “Notes to the Financial Statements – Specific Information“ pertaining to each Fund .
250 DFS GUARANTEED INVESTMENT FUNDS
Liquidity RiskLiquidity risk is the risk that the Fund will encounter difficulty in meeting obligations associated with financial liabilities .The Funds are exposed to daily cash redemptions of units . Most of their assets are therefore invested in liquid investments (i .e . investments that are traded in an active market and that can be readily disposed of) . Some Funds may invest in derivatives, debt securities and unlisted equity investments that are not traded in an active market . As a result, some Funds may not be able to quickly liquidate their investments at amounts approximating their fair values, or be able to respond to specific effects such as deterioration in the creditworthiness of any particular issuer . Units attributable to Contract Owners are redeemable on demand . However, the Company does not expect that the contractual maturity disclosed will be representative of the actual cash outflows, as Contract Owners of the instruments typically retain them for a longer period .The majority of the remaining liabilities are due within the next 3 months . Balances due within 12 months equal their carrying balances as the impact of discounting is not significant .
Management of Risks from Units Attributable to Contract OwnersUnits attributed and outstanding are considered as the Funds’ capital . The Funds are not subject to specific capital requirements on the premiums and withdrawals, other than certain minimum deposit requirements . Contract Owners are entitled to require payment of the net asset value per unit for all or any of the units they hold by giving a written notice to the Company . Units attributable to Contract Owners are redeemable for cash equal to a pro rata share of the Funds’ net asset value . Additional InformationFor further information regarding the hierarchy of financial instruments at fair value measurement and risk exposure of each Fund, please refer to the “Notes to the Financial Statements – Specific Information“ pertaining to each Fund . Details on risks and various documents on underlying funds (detailed description of each Fund’s investment policy and, where applicable, the investment policy and/or prospectus and financial statements of the underlying fund(s)) are available upon request by writing to the Company at its address:1 Complexe DesjardinsP .O . Box 9000Montreal, QCH5B 1H5
8. EVENTS SUBSEQUENT TO THE DATE OF THE STATEMENT OF FINANCIAL POSITIONFunds’ Name changesIn October 2015, the Company will make modifications to the Fund names for the following Funds:
OLD FUND NAME NEW FUND NAMEDFS GIF – Diversified Income – Quotential DFS GIF – Diversified Income – Franklin QuotentialDFS GIF – Balanced Income – Quotential DFS GIF – Balanced Income – Franklin QuotentialDFS GIF – Canadian Balanced – Bissett DFS GIF – Canadian Balanced – Franklin BissettDFS GIF – Balanced Growth – Quotential DFS GIF – Balanced Growth – Franklin QuotentialDFS GIF – Growth – Quotential DFS GIF – Growth – Franklin QuotentialDFS GIF – Dividend Income – Bissett DFS GIF – Dividend Income – Franklin BissettDFS GIF – Canadian Equity – Bissett DFS GIF – Canadian Equity – Franklin BissettDFS GIF – Small Cap – Bissett DFS GIF – Small Cap – Franklin BissettDFS GIF – Income – Fiera DFS GIF – Income – Fiera CapitalDFS GIF – Canadian Balanced – Fiera DFS GIF – Canadian Balanced – Fiera CapitalDFS GIF – Canadian Equity – Fiera DFS GIF – Canadian Equity – Fiera CapitalDFS GIF – Growth and Income – Northwest DFS GIF – Growth and Income – NEI NorthwestDFS GIF – Canadian Dividend – Northwest DFS GIF – Canadian Dividend – NEI NorthwestDFS GIF – Specialty Equity – Northwest DFS GIF – Specialty Equity – NEI NorthwestDFS GIF – Global Growth – Northwest Select DFS GIF – Global Growth – NEI Select
NOTES TO THE FINANCIAL STATEMENTS – unaudited (cont.)
251DFS GUARANTEED INVESTMENT FUNDS
Launch of new Funds in Series 5, 6 and 7 In October 2015, the following Funds will be added to the series listed below:
FUND NAME NEW SERIESDFS GIF – Canadian Equity – Jarislowsky Fraser Series 6 and 7DFS GIF – Global Balanced – Jarislowsky Fraser Series 6 and 7DFS GIF – Conservative – Multi-managers Series 5DFS GIF – Moderate – Multi-managers Series 5DFS GIF – Balanced – Multi-managers Series 5DFS GIF – Growth – Multi-managers Series 5DFS GIF – Maximum Growth – Multi-managers Series 5
Closing of FundsIn October 2015, the Company will close the following Funds:
FUND NAME
DFS GIF – Canadian Dividend – FieraDFS GIF – Income – Beutel GoodmanDFS GIF – Global High Income – Multi-managersDFS GIF – Balanced – EthicalDFS GIF – Global – Fidelity
On July 7, 2015, the Company ceased to accept additional deposits for these Funds .
252 DFS GUARANTEED INVESTMENT FUNDS
NOTES
DESJA
RDIN
S INSU
RA
NC
ED
FS GU
ARA
NTEED
INV
ESTMEN
T FUN
DS
2015 SEMI-A
NN
UA
L REPORT
DFS GUARANTEED INVESTMENT FUNDS
DFS Guaranteed Investment Funds are established by Desjardins Financial Security Life Assurance Company.
Desjardins Insurance refers to Desjardins Financial Security Life Assurance Company.
DFS GUARANTEED INVESTMENT FUNDS
0827
6E (1
5-10
)
Financial Information as of June 30, 2015
2015 Semi-Annual Report
desjardinslifeinsurance.comThis Document is also available on our website:
JUNE 2015
Thank you.Thank you for choosing the strength and stability of a company specialized in providing individual insurance and retirement savings products to over five million Canadians, every day, to ensure their financial security.
Thank you for also choosing Desjardins Group, the largest cooperative financial group in Canada, whose financial stability is recognized by the following credit ratings which are comparable, if not superior to those of the five largest Canadian banks and insurance companies:
• Standard and Poor’s A+ • Moody’s Aa2 • Dominion Bond Rating Service AA • Fitch AA-
The Contract and Information Folder contains important information on the DFS Guaranteed Investment Funds. Please read it carefully before investing. DFS Guaranteed Investment Funds is a registered trademark owned by Desjardins Financial Security Life Assurance Company. DFS Guaranteed Investment Funds are established by Desjardins Financial Security Life Assurance Company.
DFS stands for Desjardins Financial Security.
Desjardins Insurance refers to Desjardins Financial Security Life Assurance Company.
This document is printed on Rolland Enviro paper.
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