The Renaissance Advisor

AdvisorThe RenaissanceQUARTERLY FUND PROFILES / PRACTICE MANAGEMENT / OUTLOOK / OPINION Q4 – DEC. 31, 2012

ALSO INSIDE:

More on Fork in The Road: Today’s Income Decision

A 30-point check-up for your business

Re-thinking RiskWith rates in the basement, the path to success has changed

7th Century BC China decides to build a Great Wall.

TO DEFENDOUR EMPIRE,

LET’S BUILD ASMALL FENCE.

GREAT LEADERS MAKE STRONGER PLANS: TODAY’S INCOME DECISION. It’s a tough decision, but it’s time to make it. We have reached a fork in the road. The flight to “safer” assets in the face of volatile markets may have worked until now, but record low yields are proving to be a threatening force. Now is the time to plan for the future.

Renaissance is committed to going further for you. We have actionable tools, solutions and key support to make today’s income decision easier.

Get your Income Decision Toolkit today. Visit incomedecision.ca or call 1-888-888-FUND (3863).

INCOME DECISION TOOLKIT

TODAY’S INCOME SOLUTIONS

Optimal Income Portfolio

Short-TermIncome Fund

Corporate BondCapital Yield Fund

Millennium HighIncome Fund

Optimal Inflation Opportunities Portfolio(inflation mitigation)

TMRenaissance Investments is offered by and is a registered trademark of CIBC Asset Management Inc. Commissions, trailing commissions, management fees and expenses all may

be associated with mutual fund investments. Please read the Renaissance Investments family of funds simplified prospectus before investing.

Tax and Estate 3The Mortgage, the TFSA and the RRSP

Economic Outlook 4Canada: Not There Yet…

Back of the Napkin 6Diagnostics Required!

Re-Thinking Risk 8With Rates in the Basement, the Path to Success Has Changed

Solution Highlight 12Additional Income with Proven Outperformance

Thanks to Our Supporters 13A Focus on Long-term Goals

Cracking the QR Code 14

Brain Calisthenics 16

In this issue

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RENAISSANCE INVESTMENTS

Letter from the National Sales Manager

I trust that you are experiencing an inspiring business beginning to 2013.

There are many who say that there is no real RRSP season anymore (and perhaps compared to the days of faxing in orders at the end of the day tomeet the deadline – and hoping that the fax goes through – that is true). However, it remains that the highest level of sales in our industry occursduring the first calendar quarter. That period also translates into the most client interactions by advisors, as many assist clients with their annualinvestments into retirement funds. Even if it is a small portion of the client’s wealth, it still needs to be discussed. But have you thought about what the next interaction is going to be with the client, and what will be on the meeting agenda? The time to make that decision is before the first discussion actually takes place with the client.

To succeed in gaining that level of discipline and organization, make a commitment now to create a business plan for 2013. This will assist in thedevelopment of your business and contribute to increased revenues. To achieve all that you want, it is important to have a plan that can be used as a roadmap to success and as a scorecard to determine your progress. Think of it as a personal accountability partner for you and a playbook for your team.

Your plan needs to detail meetings for clients (both number of meetings and types of meetings), recommendations, social activities, personal development and marketing activities. Remember, the best business plans are not the longest or the ones that use the most paper or memory on your computer, but the ones that can easily be followed and executed against as the year progresses.

A good start on addressing your business plan can be found in Grant Shorten’s article on page 6 of this magazine titled, Diagnostics Required! A 30-point Mechanical Check-Up for Your Business.

Your Renaissance partners can help you develop a plan that fits your goals and team structure, should you be looking for some ideas or a second opinion. We strive to be a trusted business partner and want to be able to earn your business.

I welcome any comments or feedback and thank you for your support when recommending Renaissance Investments to your clients.

Sincerely,

Dave WahlNational Sales ManagerRenaissance Investments416-943-6959

Plan Ahead for Success in 2013

RENAISSANCE INVESTMENTS 3

www.renaissanceinvestments.ca/en/jamie_golombek/

With the annual RRSP contribution deadline of March 1 fast approaching, manyCanadians are pondering the age-old question: should I save for retirement orpay down my debt? In the past, this was often phrased as: which comes first,the mortgage or the RRSP? But with the introduction of the TFSA five yearsago, things got a bit more complicated.

To help answer this question, think of paying down debt as a form of after-taxinvesting. In fact, paying down debt is similar to contributing to a TFSA. For example, let’s say you direct $1,000 of after-tax cash flow to pay down debtthat carries a 5% interest rate. After one year, your debt load will have beenreduced by $1,000 and you will have saved $50 ($1,000 x 5%) of interest expense.

If, on the other hand, $1,000 of your after-tax earnings is used to make a contribution to a TFSA earning 5%, in one year’s time, the after-tax value ofyour TFSA will be worth $1,050 ($1,000 x 1.05%). In both cases, your net worth will have increased by $1,050.

So, when it comes to deciding between paying down debt and investing in a TFSA, since both options use after-tax funds, you could simply choose the “investment” (debt or TFSA) with the highest rate of return. For example, ifyour mortgage bears a rate of 4% over the next five years, and your TFSA is invested in a 5-year GIC to earn 2%, then clearly paying down debt is the wayto go (assuming no pre-payment penalties on the mortgage). If, on the otherhand, you have a very low mortgage rate of say 3% and you expect, throughinvesting in an equity-based portfolio inside your TFSA you could ultimatelyearn 5% or 6%, then the TFSA would be the better option.

In today’s market, however, while it may be difficult to get a guaranteed rate of return that exceeds the interest rate on debt, it’s important to consider thetime horizon. If TFSA funds are being invested for the long term, the anticipatedrate of return over that time horizon should be considered in any analysis.

When it comes to choosing between an RRSP contribution and debt payment,the question becomes more complex because you need to take into accountyour tax rates. Our previous report, Blinded by the Refund, showed the effectof different tax rates in the period of contribution versus the period of withdrawal.

If the rate of return on an RRSP equals the interest rate on debt, an RRSP yieldsa higher after-tax amount than paying down debt when tax rates decrease onwithdrawal and vice versa. When tax rates change between contribution andwithdrawal and the rate of return on an RRSP does not equal the interest rateon debt, the analysis is often more complex and might have to take into accountthe time horizon as well.

TAX AND ESTATE

In today’s market, however, while it may be difficult to get a guaranteed rate of return that exceeds the interest rate on debt, it’s important to consider

the time horizon.

Follow @JamieGolombek

Jamie Golombek is Managing Director, Tax and Estate Planning with CIBC Private Wealth Management. He works closely with advisors to help them provide integrated financial planning solutions for their high-net-worth clients. Jamie is frequently quoted in the media as an expert on taxation.

The Mortgage, the TFSA and the RRSPHelping clients prioritize this RRSP season

4 RENAISSANCE INVESTMENTS

Canada: Not There Yet…

ECONOMIC OUTLOOK

It’s almost official. For the first time in six years, Canada will underperform the U.S. in 2012. And the headwinds that led to this reversal of fortune will only intensify in 2013. Despite resource sector production, which will add 0.5% to GDP growth, overall activity is set to rise at a mere 1.7% pace, due to sluggishness elsewhere. In many ways, the coming year should be seen as a transition year from a bad to a better economic trajectory, as improved resource prices and earnings visibility will rekindle corporate Canada’s stored energy in 2014.

A Big Lift From Resource Extraction

Hope has sprung eternal for those bullish on the Canadian economy, as “temporary” resource disruptions were blamed for quarter-after-quarter ofsub-2% growth. There’s some truth there – weakness in the oil patch, due toupgrader problems and East Coast maintenance, alongside temporary miningsector closures, shaved a quarter point from GDP growth in 2012. Restarts toresource operations should provide a minor lift to growth in 2013, and higheroil output following years of earlier investment should see the resource sectoradd roughly 0.5% to growth in 2013. But weakness elsewhere will offset theresource sector’s upturn, leaving overall activity tracking a weaker tempo.

Even in the resource sector, some of the recent weakness does not appear tobe ripe for a rebound in 2013. Mining production has been on a weaker trendfor years, with the recent soft spell dating back to mid-2011, following thecyclical rebound. Weak metals/minerals pricing and uncertainty about globaldemand have already weighed on fertilizer output and iron ore mining expansion plans, risks we see persisting in 2013.

On the energy side, falling natural gas output in 2012 merely follows weakerproduction for over half a decade, with falling prices discouraging activity. Although price stabilization could slow the production decline, those hopingfor higher output in 2013 could be disappointed. So resource productionweakness of a “transitory” nature only explains a small share of the 2012GDP slowdown, hinting at sluggishness elsewhere.

Stable Commodity Prices Will Make Real GDP More Relevant

Sharp swings in commodity prices worked to challenge the economic relevanceof real GDP. Changes in commodity prices, while not captured directly in realGDP, visibly impact the bottom lines of corporate Canada and influence otherimportant economic measures such as employment. During booms, commoditiesboosted corporate profits, fuelling jobs and wage growth. But then the bustgot commodities slicing the other way, amplifying the damage on corporateresults and exposing Canada’s vulnerability to its undiversified economy.

The notable decline in resource price volatility in recent quarters and our projection that volatility will remain low in the coming year suggest that corporate profits will dance to the tune of a slowing economy in 2013. Thatwill be very visible in capital spending, which is increasingly being driven byoil patch investment. Already in 2012, many key players have scaled backplanned investments due to weaker Canadian oil and gas prices. And suchsensitivity to commodity valuations is evident in the historic data, as the paceof capital spending tends to soften when commodity prices fail to track higherlevels, even in the absence of an economic downturn. What’s more, historically,a stronger Canadian dollar boosted the spending power of firms importingforeign machinery, adding roughly 2.5% to real machinery and equipment investment. But with the Canadian dollar set to be range-bound next year,there won’t be a new foreign exchange lift to capital spending growth.

All told, sideways commodity prices in 2013 on soft U.S. growth and ongoingglobal challenges suggest that capital investment could slow to a 3% pace,with a pickup only set for 2014, supported by a rising trend in oil prices.

Stable commodity prices are also working to close the gap between nominaland real measures such as exports. With commodity exports likely to remainrelatively stable as a share of GDP, non-commodity exports, which recentlyturned from a secular drag to a modest support, due to the relative stability of the Canadian dollar, will have to carry the torch – and here it’s difficult tobe too optimistic. The U.S. auto sales resurgence following the recessionarydrought is coming to a plateau, with unit sales approaching pre-recession levels, while the projected softening in the inventory position stateside is a clear negative.


This time around, don’t count on the consumer and real estate. The recentsoftening in housing activity is persistent and will negatively impact economicactivity through multiple channels. Directly, homebuilding will swing to a0.1% drag on growth in 2013 from a 0.4% contribution in 2012, not countingmultiplier impacts on related durables consumption. Furthermore, with realdisposable income lagging its long-term average over the past year, it’s hardlya surprise that consumers are not tempted by near-zero retail price inflation.Real retail sales are now rising by almost a full point slower than the paceseen earlier in the year, and 1.2% below the long-term average. Even thismediocre performance is unsustainable. Over the past year, auto sales wereresponsible for around half of the increase in retail sales – a record high andalmost twice the long-term average. Recessionary-induced pent-up auto demand has now been fully depleted and it’s likely that auto sales will slownotably in 2013.

Add it all up and even with ultra-low rates through 2013, the economy is setto decelerate to the slowest pace since the recession. The resource sectorlikely won’t be enough to catapult growth to new heights, particularly if flatresource prices fail to provide an incentive for new investment. But the 2013slowing is just the economy’s last fatigued lap, after running a race on littleother than a steady shot of low rates. Thankfully, in 2014, rising external demand should see the economy catch a second wind, boosting growth, interest rates and the Canadian dollar in tandem.

www.renaissanceinvestments.ca/en/economy/

Benjamin Tal is Deputy Chief Economist for CIBC. Described as one of Canada’s leading experts onthe real estate market by the International Monetary Fund, he is responsible for analyzing economic developments and their implications for North American fixed income, equity, foreign exchange and commodities markets.

Source: CIBC

Source: Statistics Canada, Bank of Canada.

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Canada No Longer Outpacing U.S. ; Slowing to <2% in 2013 Delays Rate Hikes

3-Year Moving Window Standard Deviation of Commodity Prices


Diagnostics Required!A 30-Point Mechanical Checkup for Your Business

BACK OF THE NAPKIN

Your advisory practice is a complex machine with manymoving parts. And like all machines, it will be endlesslychallenged and tested by a wide range of external forces.

One Saturday morning, I awoke to discover that my car’s windshield washerfluid tank was completely empty, even though I had filled it up the previousday. Since a giant snow storm was looming in the forecast, I reluctantly tookmy car to the dealership for some urgent attention. Well, after a rather expensivediagnostic procedure, I was gently informed that the leaky reservoir was theleast of my problems. Needless to say, several more repairs were added to thelist, as I watched my net worth drain as quickly as my washer fluid.

While sitting in the dealership, I couldn’t help but contemplate how my oncehealthy car had quietly and systematically become a victim to things like: wearand tear, bangs and bashes, hills and valleys, and many other damaging influences.Just one week earlier, I had been driving around the city completely and utterlyoblivious to the mounting problems lurking below the surface. Of course, I alreadyknew about some of the most obvious issues, but was more than happy to livewith them until I could “find some time” to have them addressed. Nevertheless,it was only when I finally submitted my car to a proper diagnostic procedure,that the real (more serious) issues were identified and exposed.

Now, it’s important to note that, prior to completing these badly needed repairs,my car still worked. It still got me from point A to point B, and it still lookedgreat after a quick visit to the carwash. But there were a growing number ofunderlying problems – big problems.

The reality is, machines wear out and they require ongoing maintenance, serviceand repair. Sometimes a machine simply needs a bit of grease to free-up thegears. Sometimes it requires a new replacement part. But sometimes an entiresection of the machine needs a complete redesign from the ground up!

And the same is true of the advisory practice “machinery.”

The problem is, we often get so busy running the machine, that it becomes virtually impossible to see (or diagnose) any number of worsening deficiencies,fractures, blockages and other symptoms.

How often do you put your advisory practice through a diagnostic procedure –a multi-point checkup to identify areas that need fixing? If you answered

“never”…you’re in good company. Most advisors and planners simply neverget around to doing it, or have not yet considered the exercise to be a criticalrequirement of running a business.

Now, imagine what would happen if you left your automobile to crank alongwithout routine maintenance checks, oil changes, diagnostics and repairs. Whatwould happen to that machine? Initially, it would just start becoming less efficient,but then it would begin to make strange sounds, gears would start grinding,brakes would start squealing, tires would start skidding and the list goes on.

For the first little while, onlookers would only notice the external parts of themachine – the stylish lines, the trendy paint-job and the shiny hubcaps – buteventually those internal ailments would make their way up to the surface.

Diagnostics Required

Your advisory practice consists of many layers of complexity and incorporatesa broad range of functions and disciplines. Each of these elements can beviewed as the critical working components of a much larger machine. Under-standably, the idea of analyzing such a complicated machine may seem likea daunting task at first, so let’s simplify the process as much as possible.

Just as any machine can be reduced to its most basic functions, so can theadvisory practice.

As an investment advisor or financial planner, your machine’s operating mandate is essentially driven by three simple (client-centred) prime directives, and they are to:

1. FIND them2. SIGN them3. KEEP them

FINDTHEM

SIGNTHEM KEEP

THEM

ADVISORYMACHINE


Think about it for a moment. Your advisory practice machine operates for thesole purpose of: Finding qualified prospects, Signing them up as clients, andKeeping them for the long term. Naturally, deep inside those primary-functioncategories are many other wheels, gears, nuts and bolts but, collectively,those smaller components are all driven toward successfully completingtheir specified task.

An effective diagnostic procedure will systematically open up each of thosethree directives and provide a multi-point checklist, or a structured evaluationtemplate. The ultimate goal of a diagnostic process is to ensure that all ofthe necessary components are positioned properly, and that they remain intip-top working condition.

The Procedure

Start your advisory diagnostic procedure by first considering how effectivelyyour business model addresses the three big-picture prime directives.

To make it easier, let’s break it down a little further to expose some of thesub-components of Find them, Sign them, and Keep them.

Basic Operating Specifications – Advisory Practice

By making the decision to fully identify with our clients, we gain an entranceinto their personal experience, and can then begin to communicate from aplace of real empathy.

TIP: Complete this diagnostic procedure in writing and spend quality timeexpanding upon each question and response. Include your team membersin the process as you elicit candid input from your trusted partners.

Answer the following diagnostic questions:

FIND them...

1. Who (or what) is my ideal target market?

2. Do I need to redefine or update my target market?

3. What prospecting methods am I currently using in my practice?

4. How effective have these methods been in gathering new assets?

5. Do I need to make changes to my prospecting methodology?

6. How am I maintaining a full pipeline while I’m managing existing clients?

7. What else can I do to generate fresh leads?

8. Where can I look to identify other opportunities?

9. What marketing campaigns can I develop for the coming quarter?

10. How am I applying the five modalities of asset gathering?

SIGN them...

1. How effective are my communication skills?

2. What could I do to improve those skills?

3. Do I understand and capitalize on the importance of “first impressions”?

4. Do I have an effective (standardized) first-meeting procedure?

5. Do I consistently employ the tools of rapport building in my communication?

6. Do I understand and openly address the emotional needs of investors?

7. Have I developed and internalized my value proposition?

8. Have I rehearsed and internalized responses to most common objections?

9. Have I created an effective pitch book or similar tool for my meetings?

10. Do I have a standard approach around “asking for the business”?

KEEP them...

1. Am I meeting my clients’ fundamental expectations?

2. Do I operate with full transparency with my clients?

3. Do I regularly solicit feedback from my clients?

4. Do my clients know “what makes me different” from other advisors?

5. Am I (or a member of my team) always accessible to my clients?

6. Am I providing top-notch service to my clients?

7. Do I proactively contact my clients during weak market periods?

8. Do I employ active listening techniques in my client meetings?

9. Do I offer a customized service agreement to my clients?

10. Do I show interest in my clients’ lives – outside of just their investments?

Once you’ve completed the 30-point diagnostic procedure, you will comeaway with an action-list of the components that need a little bit of grease, a new replacement part or a complete redesign. Consider creating a personal“advisory board” that comprises your most trusted clients and solicit theirconstructive feedback on all areas of your business.

Finally, take a few moments to pre-book semi-annual diagnostic appointmentsinto your calendar, to ensure that your advisory practice continues to operateas a finely tuned, high-performance machine!

www.renaissanceinvestments.ca/en/practicemanagement/

Grant Shorten is Director of Strategic Insights at Renaissance Investments. He offers insights and approaches that will work with your clients and have an immediate impact on your practice.

FIND them SIGN them KEEP them

Defining your Market First Impressions Managing Expectations

Identifying Opportunities Value Propositions Being Accessible

Prospecting Methods Building Rapport Active Listening

Generating Leads Addressing Needs Excellence in Service

Filling the Pipeline Handling Objections Full Transparency

Marketing Campaigns Presentation Tools/Skills Adding Real Value


RE-THINKING

RISKWith rates in the basement, the path to success has changedOne short four-letter word says it all. Risk. Not only does it routinely describe markets and economies across theglobe, risk also encapsulates investors’ fears and rationale for investment choices.



Traditionally, investors have defined risk as the permanent loss of capital.But today’s new reality of rock-bottom interest rates and low yields has amplified another type of risk – the income shortfall. It’s time to addressthe impact that this extended, low-rate environment will have on future purchasing power – your clients’ retirement goals depend on it.

History Doesn’t Always Repeat Itself

Since about 1981, investors who bought and held government bonds were rewarded. Whether looking at total, real or risk-adjusted returns, performancewas impressive over this period. Government bonds reduced overall volatilityand were the reliable anchor of many portfolios.

This has created a bias for many investors in the dominant baby-boomer generation, who started to accumulate their wealth in the early 1980s. Many of these investors think government bonds remain a safe haven, given their past experience. It’s natural that this belief affects their investment decisions and how they perceive risk.

However, the trends that shaped the past three decades are unique. The1980s began with double-digit interest rates and inflation – the opposite oftoday’s environment, with rock-bottom interest rates and inflation. Investorswho enjoyed strong government bond performance since the early 80s areunlikely to experience the same performance going forward.

Government Bonds: Still a Safe Haven?

Over the past 30 years, most developed-world government bonds have delivered:

1 Positive real yields

2 Consistent, positive absolute returns and stability to an equity portfolio

3 Guaranteed return of principal, if held to maturity

Together, these three traits painted a powerful picture of government bondsas a safe haven. But today, only the third point remains consistently accurate– most government bonds offer guaranteed return of principal if held to maturity.Notably, the first two traits are now dubious. By and large, government bondyields have dropped below the rate of inflation, causing investors to lose purchasing power over time.

Also, with today’s record-low yields, the downside price risk (if yields rise) forlow-yielding government bonds far outweighs the remaining potential forcapital appreciation (if yields fall). If interest rates were to rise, governmentbonds could disappoint, and their future volatility may be higher than expectedfor those who are basing forecasts on recent history. Due to our new economicrealities, government bonds are simply no longer the same safe haven.

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See The Solution on page 10.

Although government bond investors have been rewarded over the last 30 years, it’s worth noting the historicalimpact of inflation. In fact, between 1945-1958, inflation transformed nominal gains into real losses! By and large,government bond yields have again dropped below the rate of inflation in recent times.

88 Years of Inflation Eroding WealthU.S. Long-Term Government Bond Returns: Growth of $10,000


Historically Low Yields

Going back to 2001, a client investing inlong-term Canadian government bonds,needed about $900,000 in assets to generate $50,000 of annual income.1

Today, they would need about 2.3 times2 more than that, or $2.2 million to generate that same income.

Living Longer

Canadians now live an average of 20 yearsafter they retire, and many are living muchlonger than that. For a married couple atage 65, there is a 50 percent chance that one will live past 90 years old.3

Low Inflation but Big Impact

Over the long term, even meager inflationcan erode your clients’ wealth. At an inflation rate of only 2%, $100,000 in today’sdollars will buy only $67,297 of goods andservices in 20 years. Looking back, prices formany key everyday items have risen substantially. For example, gasoline has had an annual inflation rate of 4.7 percent over the past 32 years.4

The SolutionOf course, many of your clients prioritize safety of their capital, and they will continue to do so. But now more than ever, they needto understand the importance of maintaining their purchasing power, or else risk outliving their wealth. This means altering theirperceptions and expectations based on today’s investing environment.

Depending on your clients’ risk tolerance, time horizon and investment objectives, one way to generate additional yield is to move up the risk spectrum from government bonds into investment-grade corporate bonds, high-yield corporate bonds, real estate investment trusts (REITs), dividend stocks or a managed approach that diversifies across a number of income-producing assets.

To kick-start discussions with your clients about risk,and how to help them generate sufficient income toreach their investment goals, Renaissance has built a turn-key campaign called Fork in the Road: Today’s Income Decision that includes a comprehensive toolkit and many client-friendly resources. For more, go to www.incomedecision.ca.

Three Key Forces Threaten to Erode Your Clients’ Wealth

1 Assumes a 5.8% annual yield as at September 30, 2001 (Source: Bank of Canada – Long-Term Government of Canada Benchmark Bond Yields). 2 Assumes a 2.37% annual yield as at December 31, 2012 (Source: Bank of Canada – Long-Term Government of Canada Benchmark Bond Yields). 3 Source: Canadian Institute of Actuaries,UP-94 Projected to 2015. 4 Source: Statistics Canada, for the period between December 1980 and July 2012.

These three forces show that you and your clients need to re-think risk in light of today’s investing environment. For investors relying on governmentbonds, there is a real tradeoff. If held to maturity, their principal is guaranteed, but they run the risk of eroding their long-term purchasing power.

Many Unhappy Returns for Canadian Income Investors

of income investors are not satisfied with returns.

of those investors are not looking to move to investments that provide greater return potential (over half of them say it’s “too risky”).

of Canadian retirees are afraid of running out of money over the long term.

of investors say they have retirement saving primarily invested in GICs or other guaranteed investments.

Source: CIBC Survey, January 2013.

Powered by

Economy“As baby boomers retire over the next 15 years,national income levels and discretionaryspending in the economy will decline, keeping economic growth levels lower than what we have been accustomed to for the past several decades.”

Jeffrey Waldman, First Vice-PresidentGlobal Fixed Income

Interest Rates“Central banks are going to keep their interest rates at very low levels – that’s the key to the whole interest-rate outlook that we have.”

John Braive, Vice-ChairmanGlobal Fixed Income

Corporate Bonds“Instead of just having a laddered bond fund (a bunch of government bonds), bolstering your returns by using corporate bonds is beneficial in this environment – the yieldspreads are still very attractive for investors.”

Patrick O’Toole, Vice-PresidentGlobal Fixed Income

High-Yield Bonds“One of our key areas of focus is the crossoverarea. That’s where a company is just on theverge of being upgraded to investment grade –these companies have the credit metrics andthe business risk very similar to an investment-grade company, but the yield on the bonds istypically around 200 basis points wider than a similar investment-grade company.”

Nicholas Leach, Vice-PresidentGlobal Fixed Income

ADVISOR ToGoA

Access to the experts when you need them

Patrick BradleyBrandywine Global Investment Management, LLC

John BraiveCIBC Global Asset Management Inc.

Jeff WaldmanCIBC Global Asset Management Inc.

Pablo MartinezCIBC Global Asset Management Inc.

www.advisor.ca/togoListen to short podcasts from the experts

Podcast > FollowGrowth Beyond Borders

Podcast > Bonds AreStill Attractive

Podcast > Choose Corporate Over Government Bonds

Podcast > Rise AboveLow Interest Rates

INSIGHT FROM THE EXPERTS AT CIBC GLOBAL ASSET MANAGEMENT INC.

NEW

42%

54%

28%

37%


Video > Leverage the high-yield opportunity


Additional Income with Proven Outperformance

SOLUTION HIGHLIGHT

Our lead article highlights why it’s important to generate additional yield in this environment by moving gradually up the risk spectrum, leveraging assets such as corporatebonds, high-yield bonds, REITs and dividend stocks. The ability to supplement that extra income with consistent returns is also key to protecting purchasing power in the future.

Renaissance has the diversified income solution line-up to meet your clients’ needs for additional income, stability and performance. The solutions highlighted below have consistently outperformed their peers over various market cycles.

Z For more information on how to put these solutions to work for your clients, please speak to your Renaissance Investments representative.

Need

Solution

Core Income

Offer tax-efficient income, capital appreciation with lowvolatility and inflation protection

Renaissance Optimal Income Portfolio

See page 66 for more fund information

Enhanced Income

Offer enhanced income opportunities from diversified, tax-efficient sources of income

Renaissance Corporate Bond Capital Yield Fund and/orRenaissance Millennium High Income Fund

See pages 56 and 74 for more fund information

1 Performance as at December 31, 2012, Source Morningstar Direct. 2 Canadian Fixed Income Balanced Category, Fund inception date November 13, 2007. 3 Canadian Fixed Income Category, Fund inception date November 18, 2009. 4 Canadian Dividend & Income Category, Fund inception date February 2, 1997.

1 yr 2 yr 3 yr 5 yr 10 yr 15 yr Since Inception1

Renaissance Optimal Income Portfolio 7.4% 5.8% 6.8% 3.9% – – 3.9%

Fund outperformance vs. Category2 +2.3% +1.9% +2.0% +0.4% – – –

Renaissance Corporate Bond Capital Yield Fund 6.3% 5.8% 5.9% – – – 5.4%

Fund outperformance vs. Category3 +2.6% +0.4% +0.3% – – – –

Renaissance Millennium High Income Fund 9.3% 8.5% 11.1% 2.7% 7.8% 8.2% 8.4%

Fund outperformance vs. Category4 +1.4% +4.8% +4.6% -0.4% -0.3% +1.1% –


A Focus on Long-term Goals

THANKS TO OUR SUPPORTERS

www.incomedecision.caCIBC Wood Gundy is a division of CIBC World Markets Inc., a subsidiary of CIBC and a Member of the Canadian Investor Protection Fund and Investment Industry Regulatory Organization of Canada. ™ Renaissance Investments is offered by and is a registered trademark of CIBC Asset Management Inc.

Sponsored in part by:

Hear from:

When: February 7, 2013 at 1 pm

Where: CIBC Wood Gundy 1969 Upper Water Street Suite 1801, Halifax

RSVP: Haiping Fu at 902-420-6209

FORK IN THE ROAD: TODAY’S INCOME

DECISION.A seminar you can’t

afford to miss.

Please join me, Gordon Forsey, to find out:

What impact record-low yields are having on your financial goals

Why traditional, “safer” income investments could be putting you at risk

How to find additional income, stability and returns in this new financial reality

Gordon Forsey, P.Eng., MBA, CIM, FCSI

Investment Advisor, Portfolio Manager

Tel: 902-420-6203

Barry Morrison, CFA

Portfolio Manager, Renaissance Millennium High Income Fund

Chief Executive Officer, Morrison Williams

Without the support of advisors like you, Renaissance Investments would not enjoy the privilege of helping so many Canadians realize their investment goals. Here is one of the outstanding professionals we are so very proud to work with.

What I love about the business:

I enjoy the opportunity to help my clients achieve their retirement goals by developing and executing strategies that create investor wealth and financialsecurity over the long term.

How I’m helping clients navigate the extended low-yield environment:

My focus has been on fixed-reset preferred shares, convertible debentures, investment-grade corporate bonds and high-quality, dividend-growing common stocks.

How I define “risk” for clients:

While clients will often define risk as the short-term volatility of individual securities in their portfolio, I define risk as not achieving their long-term incomeneeds throughout their retirement. Investors must stay focused on their long-term goals and not become distracted by the day-to-day volatility of the market.

One thing I will be focused on in 2013:

As I perform client reviews, I will be looking for opportunities to add quality income-generating investments, which also have a growth element. On thefixed income side, I will be positioning clients in tax-efficient, quality productsthat will preserve principal in a rising interest rate environment.

On the need for income, have you leveraged the Renaissance clientresources around Today’s Income Decision?

I am currently planning a prospect event using the Renaissance invitation materialcalled “Fork in the Road: Today’s Income Decision.” Speaking at the event isBarry Morrison, Portfolio Manager of the Renaissance Millennium High IncomeFund. The Renaissance team has been very helpful to me as I put this event together,as have our internal marketing people. I will also be using Renaissance marketingmaterial for followup after the event and in direct one-on-one meetings.

Best tip for gaining new clients:

Identify a group of high-net-worth individuals whom you would like to work withand make regular contact with them through periodic emails and seminars.

Favourite hobbies:

Travel, skiing and biking

One item I can’t be without:

My iPhone

GordonForseyFirm: CIBC Wood Gundy,

Halifax

Years in Business: 15

Team Members: 2

Client Invitation

Make it easy for clients to get your contact info, send you a message, visit your website, or learn more about yourproduct offering by incorporating a Quick Response®

Code (QR Code) into your marketing materials.

CRACKING THE

QR CO

DE Maximize your sales and marketing

with this interactive technology

It’s easier than you think.


What’s the deal with those little black squiggly boxes?Already ubiquitous in Europe and Asia (code scanners are standard for Japanese mobilephones), QR Code technology is rapidly becoming an important element of marketingcommunications everywhere. How can incorporating an unremarkable black square intoyour business cards, newsletters, statements or product sheets help you boost your business?

The key differentiator of the QR Code is instant access to information. While your currentmarketing materials display your contact information, readers have to manually enter thatinformation into their communication devices if they want to contact you. By making yourcontact information available in a QR Code, readers have your information loaded with aquick scan.

Don’t stop now; the possibilities are endless! Store your website location with a “hardlink”and the smartphone scanner will automatically browse to your site. Better yet, directprospects or clients to a microsite showcasing an upcoming seminar or new service offering.Load contest information, investment tips or interest rate reminders that generate anemail message to you for instant client involvement. Or change it up to add a seasonalmessage when appropriate.

Those little black squares store a surprising amount of information that can be easily accessed by anyone with a smartphone. QR Codes can turn your basic two-dimensionalprinted documents into active marketing tools, linking readers to a limitless world of helpful information.

Remember to always use QR Codes to provide an extra level of information. Use them toenhance your clients’ experience and show them something really new and interesting.

Fun with QR CodesWho doesn’t love a new toy? Here’s a sampling of interestingthings marketers are doing with QR Codes.

1. Send a personalized video on a bottle of whiskeyFor Father’s Day, Brazilian distiller Diageo introduced bottles of whiskey with QR Codes that allow buyers to record personalized video messages.

2. Order food (and pay for it)Split Bread – a San Francisco gourmet sandwich shop – givespatrons the option to scan the QR Code on their table for thedigital menu and place their order without waiting for a waiter.

3. Buy a book, sign up for a newsletterSimon & Schuster hardcover and trade paperback books willfeature a QR Code enabling readers to sign up for a newsletter.

4. Enhance your art gallery experienceA Portuguese photographer uses QR Codes to connect tomusic, giving the viewer access to soundscapes designed foreach photo in his exhibit.

5. Share modern-day mixtapesThe mixtape lives on: create a special playlist for that certainsomeone on website Spotify and send them a greeting cardwith a QR Code that leads directly to the mix.

Good things do come for freeWhat started out as a simple device for assembly line efficiencyhas transformed into a high-tech tool for the savvy marketer.

Quick Response technology, invented in 1994 by a Toyota subsidiary, was intended for use in the car industry. The problem:keeping track of vehicles during the manufacturing process. Thesolution: a two-dimensional matrix code affixed to all the car components, allowing them to be scanned at high speed and sentalong the assembly line.

The QR Code’s fast readability and large storage capacity (up to 7,000 numeric characters compared to 20 in a UPC barcode) hasled to usage far beyond what the original designers intended.From its manufacturing roots, the code has spread to retail, logistics, sales and even the singles’ scene: a bar in Singapore ismaking it easy for shy singles to start up a conversation with the“Bottle Message” QR Code tags for beer bottles that let you entera message for another person to scan and read.

QR Code is available in open format and the owner has promisedto never exert patent rights on it. There’s nothing stopping youfrom building your own info-rich quick response code today.

®QR Code is a registered trademark of DENSO WAVE INCORPORATED.

Everyone’s doing itThere are plenty of QR Code-generating websites you can use to build QR Code images.Try Kaywa, Qurify or Delivr to convert a URL, text or contact information to a QR Code.Once converted, you can download the QR image and insert it into any file. Introducethe QR Code with a simple instruction such as “Scan here for more information.”

Newer phones running on the Android platform usually have a built-in scanner, or userscan download a barcode scanner from Google Play or Android. iPhone users can grab a barcode scanner from the App Store. BlackBerry users with BBM 5.0 or later have a scanner option in the Messenger menu (or they can find one in App World). Whatever the device, the steps are essentially the same:

Sources: 1. http://mashable.com 2. http://www.qrcode.com 3. http://www.qrme.co.uk 4. http://www.geeksugar.com

TRY IT. Use your device to connect to the web page for Today’s Income Decision using this QR Code.

Open the scanner app (this will activate the camera)

Aim at the QR Code and focus

Snapand scan



brain calisthenics

Check your answers at www.renaissanceinvestments.ca/magazine/answers/

Spot the difference – Can you spot the five differences between the pictures below?

Sudoku – Complete the Sudoku puzzle so that each and every row, column and 3x3 box contains the numbers one through nine only once.

3 8 4 9

7 9 3 8

1

9 3 1 8 7 4

1 2

7 6 2 4 3 9

7

6 4 2 3

1 2 9 7

Word scramble – Unscramble the following letters to spell words from the article on pages 8-11:

1. paeetnscasul

2. asotfllrh

3. bnod

4. ttiryuam

5. pcoepiitanar

6. reeod

7. cnipuragsh

8. peucmtrs

9. edderald

10. pnpyuah

Source: 4puz.com

1600 BC Stonehenge is completed – over1500 years after construction began.

™Renaissance Investments is offered by and is a registered trademark of CIBC Asset Management Inc.

TO CREATE A MASTERPIECE THEY MOVED

A FEW STONES

,

.

GREAT LEADERS KNOW BUILDING FOR THE FUTURE REQUIRES A STRONGER FOUNDATION.

At Renaissance, we understand that building business takes time and dedication. We also believe that the

boldest accomplishments begin one block at a time.

The Renaissance team offers dedicated business-building support, including regular modules that provide specific tactics to support your client relationships. Our experts will work with you on ideas that can set you apart from the competition and have a lasting impact on your practice.

renaissanceinvestments.ca

BUILDING YOUR BUSINESS

FOR DEALER USE ONLYRenaissance Investments and the Axiom Portfolios are offered by CIBC Asset Management Inc.This material was prepared for investment professionals only and is not for public distribution. It is for informational purposes only and is not intended to convey investment,legal or tax advice. The material and/or its contents may not be reproduced or distributed without the express written consent of CIBC Asset Management Inc.™ Axiom, Axiom Portfolios and Renaissance Investments are registered trademarks of CIBC Asset Management Inc.

To learn more about how Renaissance Investments can help you and your clients, visitwww.renaissanceinvestments.caor call 1-888-888-FUND (3863).

Printed in Canada on 25% Post Consumer Recycled Paper

PODCASTS on Advisor.ca

ADVISOR ToGo

ACCESS THE EXPERTS WHEN YOU NEED THEM

How do I make the right income decision for clients in this low-yield environment?

that matter most

Get connected.

www.advisor.ca/togo

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“Find Yield in Down Markets”

By: Barry Morrison, Morrison Williams

Investment Management

Listen Now

“Rise Above Low

Interest Rates”

Listen Now

“Don’t Give up on Bonds”

Listen Now

By: Pablo Martinez, CIBC Global Asset

Management

By: Patrick Bradley, Brandywine Global

Investment Management

™ Renaissance Investments is offered by and is a registered trademark of CIBC Asset Management Inc.

*Source: Morningstar, for the periods specified ending November 30, 2012 for Class A units of the funds. ©2012 Morningstar Research Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. Quartile rankings are determined by Morningstar Research Inc., an independent research firm. Quartile rankings are comparisons of the performance of a fund to other funds in a particular category and are subject to change monthly. The quartile ranking reflects performance of Class A. Please read the Renaissance Investments family of funds Simplified Prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. ™Renaissance Investments is offered by and is a registered trademark of CIBC Asset Management Inc.

STRONG PERFORMANCE WON’T HAPPEN WITH HALF-HEARTED EFFORT. IT REQUIRES AN ALL-STAR TEAM.

Great investment firms are driven by outperformance. Renaissance is part of a family that has set an ambitious course for risk-adjusted returns versus its peers. With 29 funds rated as either 4 or 5 Stars by Morningstar,

CIBC Asset Management is a leader in our industry*. Competitive fund performance ranks high on the list of things you expect from an investment partner. Take confidence in knowing that Renaissance is driven by the same expectation.

renaissanceinvestments.ca

STRONG PERFORMANCE

1972The Goal. Canada defeats the Soviets.

Photo credit: Frank Lennon/Toronto Star

TO MAKE HISTORY, THEY

NEEDED A HALF-STAR

LINE-UP.CIBC Asset Management:A performance leader

02001E(201302)

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