Cidel Captive Insurance Investment Platform
August 2011
Agenda
Cidel Overview
Investment Management
Captive Platform Overview
Investment Platforms
Service Model
Why Cidel?
For information purposes only and not for public use
2
Cidel Overview
Cidel is an international financial service group that designs and implements
customized financial solutions to help clients build, preserve and
transfer wealth.
With a strategic network of operations in Barbados, Canada and
internationally, Cidel’s broad range of investment, trust and structuring
capabilities provide clients with solutions that are global, innovative,
transparent and compliant.
In the world of private banking and trust, Cidel is recognized as a dedicated,
high calibre advisor with exceptional, longstanding relationships.
Largest private wealth manager service provider in Barbados (65 staff)
For information purposes only and not for public use
3
Cidel Overview
Our Company:
• Focused on delivering:
- Fiduciary services
•
•
•
-
Trust
Corporate
Active business services
Asset management
•
US $4.3 billion in assets
under administration
• Shareholders:
- Privately owned
- Scotiabank
• Licensed financial institution in all
jurisdictions of operation
• IRS qualified intermediary status
• Non-deposit taking institution
• Offices in:
• Barbados, Bermuda, Calgary,
Johannesburg, Toronto, BVI
• Presence in Venezuela,
Colombia and Mexico
For information purposes only and not for public use
4
Why Cidel for Captives?
• Largest provider of wealth management services to the international
sector in Barbados
• Dedicated service team in most of the key markets including Barbados
• Best-in-class managers
• Both passive and active management
• Tactical vs 100% strategic
• Advanced custody and reporting
• Credit by Scotia
• Custody by RBC Dexia
5
Agenda
Cidel Overview
Investment Management
Captive Platform Overview
Investment Platforms
Service Model
Why Cidel?
For information purposes only and not for public use
6
Investment Management
Cidel combines the strength of institutional investment partners with the
knowledge and skill of its investment committee to offer clients a variety
of discretionary portfolio solutions.
• Focus on capital preservation and stable returns
• Portfolio assets strategically allocated to independent investment
managers that have a particular investment style or geographic focus
• Portfolios provide access to institutional products at institutional
pricing
• Portfolios are reviewed and adjusted based on the state of the capital
markets and clients’ target return and risk profile
• Personalized portfolios
For information purposes only and not for public use
7
Investment Management
Investors with significant assets face challenges in allocating assets
effectively. Cidel recognizes and addresses these challenges by working
closely with investors, institutions and professional advisors to establish
and implement:
•
•
•
•
•
•
•
Formal investment mandate
Strategic asset allocation
Manager selection
Ongoing management
Investment review process
Efficient execution
Consolidated reporting
For information purposes only and not for public use
8
Agenda
Cidel Overview
Investment Management
Captive Platform Overview
Investment Platforms
Service Model
Why Cidel?
For information purposes only and not for public use
9
Captive Platform Overview
• Not competing with captive managers: investment management NOT
captive management
• Service excellence: dedicated team, superior systems, high standards,
sound experience
• Broad geography: Barbados, Bermuda, BVI, Canada, US, Mexico,
Latin America
• Investment philosophy: external manager selection, tactical,
discretionary or advisory
• Robust custody and investment platform
• Risk management around investments key
10
Captive Platform Overview
•
•
•
•
Letters of credit: Scotia
Directorships if required
Fees: competitive, flexible
Custody with RBC Dexia
11
Agenda
Cidel Overview
Investment Management
Captive Platform Overview
Investment Platforms
Service Model
Why Cidel?
For information purposes only and not for public use
12
Investment Strategy
• Majority of captives are managed on a discretionary basis so captive
manager does not have to make investment decisions
• Set strategic asset allocation (ie. 80%-20% FI and equities)
• Tactically adjust strategic allocation depending on market conditions
• Independently select 3rd party managers (hire and fire)
13
Money Market: BlackRock Institutional Funds
Founded in 1988, BlackRock is
a premier provider of global
investment management, risk
management, and advisory
services. BlackRock’s assets
under management total
US$3.66 trillion across equity,
fixed income, cash
management, alternative
investment, real estate and
advisory strategies.
Fund: BlackRock Institutional US Dollar Liquidity Fund
Benchmark: 7-Day Libor
14
US Fixed Income Manager: SeaCrest Investment Management
SeaCrest Investment
Management, LLC (SeaCrest)
specializes in the management
of domestic and international
fixed income portfolios. Its
investment management team
has over 60 years of combined
experience and is led by the
former Global Head of Fixed
Income for Morgan Stanley
Investment Management.
Seacrest is employee owned and
based in Purchase, New York.
Fund: SeaCrest Intermediate Government Portfolio
Benchmark: Barclays Capital US Government
Intermediate Index
15
Canadian Fixed Income Manager: J Zechner Associates
J Zechner Associates is an
independent firm owned by its
employee partners. They
actively manage over $2 billion
in assets and have been growing
since 1993. They are
disciplined, top-down, active
managers focused on three
investment strategies: Canadian
Equity, Canadian Fixed Income,
and Balanced.
Fund: J Zechner Canadian Fixed Income
Benchmark: DEX Universe Bond
16
Equity: Toron Investment Management
Toron Investment Management,
founded in 1988, is an
investment counselling firm
providing a range of investment
management services to
individuals and institutional
clients with a focus on global
equity investing. Toron is
headquartered in Toronto,
Canada.
Fund: Toron Core Equity Fund (USD)
Benchmark: MSCI World
17
Equity: RAFI
Founded in 2002 by Robert D.
Arnott, Research Affiliates® is
a global leader in innovative
investing and asset allocation
strategies. Research Affiliates®
pioneered the Fundamental
Index® concept and continues
to create innovative strategies
that respond to the current needs
of the market.
Fund: Cidel Enhanced RAFI Index Fund - US Large Cap
Benchmark: S&P 500 Total Return Index
18
Research Affiliates Fundamental Index®
Efficient Indexing
for an Inefficient Market®
Doug Gratz, CFA
Associate Director
gratz@rallc.com
Important Information
■
By accepting this document you agree to keep its contents confidential and not to use the information contained in this document, and in the other materials you will
be provided with, for any purpose other than for considering a participation in the proposed transactions. You also agree not to disclose information regarding the
transactions to anyone within your organization other than those required to know such information for the purpose of analyzing or approving such participation. No
disclosure may be made to third parties (including potential co-investors) regarding any information disclosed in this presentation without the prior permission of
Research Affiliates, LLC.
■
The material contained in this document is for information purposes only. This material is not intended as an offer or solicitation for the purchase or sale of any
security or financial instrument, nor is it advice or a recommendation to enter into any transaction. The information contained herein should not be construed as
financial or investment advice on any subject matter. Research Affiliates and its related entities do not warrant the accuracy of the information provided herein, either
expressed or implied, for any particular purpose. Nothing contained in this material is intended to constitute legal, tax, securities or investment advice, nor an opinion
regarding the appropriateness of any investment, nor a solicitation of any type. The general information contained in this material should not be acted upon without
obtaining specific legal, tax and investment advice from a licensed professional. Indexes are unmanaged and cannot be invested in directly. Returns represent past
performance, are not a guarantee of future performance, and are not indicative of any specific investment.
■
THE INDEX DATA PUBLISHED HEREIN IS SIMULATED, UNMANAGED AND CANNOT BE INVESTED IN DIRECTLY. PAST SIMULATED PERFORMANCE IS NO
GUARANTEE OF FUTURE PERFORMANCE AND IS NOT INDICATIVE OF ANY SPECIFIC INVESTMENT. ACTUAL INVESTMENT RESULTS MAY DIFFER. The
simulated data contained herein is based on the patented non-capitalization weighted indexing system, method and computer program product (see Robert D. Arnott,
Jason Hsu and Philip Moore. 2005. “Fundamental Indexation.” Financial Analysts Journal [March/April]:83-99).
■
Any information and data pertaining to indexes contained in this document relates only to the index itself and not to any asset management product based on the
index. No allowance has been made for trading costs, management fees, or other costs associated with asset management as the information provided relates only
to the index itself. With the exception of the data on Research Affiliates Fundamental Index, all other information and data are based on information and data available
from public sources.
■
Russell Investment Group is the source and owner of the Russell Index data contained or reflected in this material and all trademarks and copyrights related thereto.
The presentation may contain confidential information and unauthorized use, disclosure, copying, dissemination, or redistribution is strictly prohibited. This is a
presentation of Research Affiliates, LLC. Russell Investment Group is not responsible for the formatting or configuration of this material or for any inaccuracy in
Research Affiliates’ presentation thereof.
■
The trade names Fundamental Index®, RAFI®, the RAFI logo, and the Research Affiliates corporate name and logo are registered trademarks and are the exclusive
intellectual property of Research Affiliates, LLC. Any use of these trade names and logos without the prior written permission of Research Affiliates, LLC is expressly
prohibited. Research Affiliates, LLC reserves the right to take any and all necessary action to preserve all of its rights, title and interest in and to these marks.
■
Fundamental Index®, the non-capitalization method for creating and weighting of an index of securities, is patented and patent-pending proprietary intellectual
property of Research Affiliates, LLC (US Patent No. 7,620,577; 7,747,502; and 7,792,719; Patent Pending Publ. Nos. US-2007-0055598-A1, US-2008-0288416-A1,
US-2010-0191628, US-2010-0262563, WO 2005/076812, WO 2007/078399 A2, WO 2008/118372, EPN 1733352, and HK1099110).
©2011, Research Affiliates, LLC. All rights reserved. Duplication or dissemination prohibited without prior written permission.
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RAFI Global 2011Q2
©Research Affiliates, LLC
Research Affiliates
Research Affiliates, LLC
Mission
■ Concentrate on Research and product development
■ Partner with world-class Affiliates to bring product to market
Global leader in
■ Global tactical asset allocation (GTAA)
■ Innovative indexation
Profile
■ Approximately $83 billion in assets managed using RA investment
strategies as of June 30, 20111
■ Founded in 2002 by Rob Arnott
■ Majority employee-owned
1As
of 6/30/2011: Based on estimates. Includes assets managed or sub-advised by Research Affiliates or licensees using RAFI, eRAFI®, or GTAA strategies.
Note: Please refer to the disclosure slide at the end for all relevant disclaimers, disclosures, and information on our intellectual property.
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RAFI Global 2011Q2
©Research Affiliates, LLC
Equity Philosophy
Indexing is a Great Strategy
(if properly designed)
The Advantages of Passive Investing
Index funds are a compelling choice for investors
■
■
■
■
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■
Broad market exposures
Diversification
Large investment capacity
Low fees and expenses
Low due diligence and monitoring costs
Superior performance over time relative to most active managers
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RAFI Global 2011Q2
©Research Affiliates, LLC
Frame of Reference
Two Views on the Markets
Cap-Weight
Market Centric View
Graham & Dodd
Economy-Centric View
 Markets are efficient—prices reflect true
valuations
 Departures from cap weight are active
bets, inherently a zero-sum game
 Invest in companies proportional to
market valuation
 Seek equity risk premium not alpha
 Markets are constantly seeking fair
value, but prices are rarely right
 Some companies can get overpriced,
some underpriced
 The market itself makes active bets
 Create valuation model of the company
and invest in ones which offer the best
rate of return
25
25RAFI Global 2011Q2
©Research Affiliates, LLC
Cap-Weighted Approach: Weights Linked To Price
Data From the Tech Bubble of 2000
1999
As of March 31
2000
2001
2002
Cisco
Percent in Russell 1000
Percent of Economy*
P/E
1.65%
0.14%
81.76
4.09%
0.20%
181.91
1.11%
0.28%
25.09
1.25%
0.44%
21.96
Nortel
Percent in FTSE Canada
Percent of Economy*
P/E
10.89%
2.92%
37.31
29.40%
3.90%
122.82
10.28%
4.31%
28.2
3.78%
6.27%
—
Nokia
Percent in FTSE Finland
Percent of Economy*
P/E
14.91%
16.23%
43.91
82.56%
17.52%
86.03
79.20%
20.71%
31.56
41.61%
22.36%
37.1
Ericsson
Percent in FTSE Sweden
Percent of Economy*
P/E
19.25%
6.67%
32.13
45.83%
8.44%
95.99
23.78%
8.95%
25.99
10.04%
9.69%
57.22
*Percent of Economy represents the rebalance weight of each company in its respective RAFI Country Index.
Source: Research Affiliates, based on data from Wilshire Atlas and Bloomberg.
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RAFI Global 2011Q2
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Are Markets Becoming More Efficient With Time?
Bubbles are clinical symptoms of mispricing
■
■
■
■
■
Tulip Mania (1637)
John Law’s Mississippi Company (1719–21)
The South Sea Company (1720)
Railway Mania (1840s)
Roaring Twenties (1922–1929)
Recent bubbles
■
■
■
■
■
Nifty Fifty (early 1970s)
Japanese Asset Prices Bubble (1980s)
Dot-com (1997–2000)
Real Estate (2005–2007)
Commodities (2008)
Note: All Bubbles Crash!… Which one is next?
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RAFI Global 2011Q2
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The Fundamental Index® Methodology
Efficient Indexing
for an Inefficient Market®
The Fundamental Index Approach
Select and weight stocks by non-price measures of firm
size
■ Sales, cash flow, dividends, and book value
Achieve excess returns over cap weighting1
■ 2–4% in developed markets
■ Greater in less efficient markets
Preserve the advantages of passive investing
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Diversification
Liquidity
Transparency
Broad economic representation
Low cost access to equity markets
1Based
on Research Affiliates historical simulated data using CRSP, Compustat, Worldscope and Datastream, on universe of U.S. equities 1962-2009 and
International equities 1984-2009.
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RAFI Global 2011Q2
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The Fundamental Index Factors
Effectively break the link with price
■ Pricing errors are uncorrelated
■ Both overvalued and undervalued stocks will be either overweighted
or underweighted, but the errors largely offset each other
Metrics reflect objective measures of relative size
■
■
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■
Widely acceptable measures of company size
Less susceptible to gaming
Easily accessible data
Not intended to be predictive of future size or value
Broadly available across countries
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RAFI Global 2011Q2
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RAFI Developed 1000 Weights:
Composite Measure of Size, 2011 Target Weights
5-Year Average
Sales
Cash Flow
Dividend
Current
Book Value
Weight Rank
Weight Rank
Weight Rank
Weight Rank
RAFI
Weight
Exxon Mobil
1.4%
2
1.6%
2
1.2%
7
0.8%
15
1.4%
Bank of America
0.5%
18
0.9%
6
1.0%
11
1.5%
1
1.1%
ING
0.7%
9
2.2%
1
0.4%
51
0.4%
44
1.1%
General Electric
0.7%
11
0.7%
18
1.5%
1
0.8%
11
1.0%
Wal-Mart
1.5%
1
0.7%
17
0.5%
36
0.5%
28
0.7%
Source: Research Affiliates, LLC., based on data from Bloomberg back office.
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RAFI Global 2011Q2
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Simulated RAFI Developed 1000
1984–June 2011
Ending Value
of $1
Annual
Return
Volatility
MSCI World
$14
10.0%
15.5%
0.33
0.0%
MSCI Equal Weight Developed
$20
11.5%
16.2%
0.41
4.1%
Book
$22
11.9%
15.8%
0.45
4.4%
Cash Flow
$29
13.1%
14.9%
0.55
4.4%
Sales
$28
12.8%
16.3%
0.49
5.2%
Gross Dividend
$30
13.2%
14.6%
0.57
6.2%
RAFI Composite
$27
12.8%
15.2%
0.52
4.5%
Index
Sharpe Tracking
Ratio
Error
Source: Research Affiliates, LLC. based on data from Bloomberg, Datastream and Worldscope. THE INDEX DATA PUBLISHED HEREIN IS SIMULATED, UNMANAGED
AND CANNOT BE INVESTED IN DIRECTLY. PAST SIMULATED PERFORMANCE IS NO GUARANTEE OF FUTURE PERFORMANCE AND IS NOT INDICATIVE OF ANY
SPECIFIC INVESTMENT. ACTUAL INVESTMENT RESULTS MAY DIFFER.
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RAFI Global 2011Q2
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Benefits of a Composite Approach
Any single-metric index works, but has a structural bias
■ Sales—overexposed to large companies with thin margins
■ Cash flow—overexposed to cyclical stocks at cyclical peaks
■ Dividends—overexposed to mature, high-yield companies and
exclusion of growth companies
■ Book value—overexposed to companies with aggressive accounting
Composite approach improves methodology
■
■
■
■
Diversifies exposure to data source, sectors, and other risks
Improves robustness of methodology
Improves stability of factors
Superior risk–return performance*
*Research Affiliates historical simulated data based on universe of U.S. equities 1962-2007.
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RAFI Global 2011Q2
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Averaging Over Five Years Improves Performance
1962–June 2011
■ Helps smooth peaks and valleys in
financial data
■ Less susceptible to aggressive
accounting
■ Recent financial data more highly
correlated with recent price moves
■ Breaks the link with price
Annual Return
Annual Volatilty
Value Add
Tracking Error
Information Ratio
Turnover
5-Year
11.66%
15.43%
1.99%
4.52%
0.44
11.67%
4-Year
11.64%
15.44%
1.97%
4.49%
0.44
11.81%
3-Year
11.60%
15.45%
1.93%
4.43%
0.44
12.01%
2-Year
11.56%
15.47%
1.89%
4.39%
0.43
12.32%
1-Year
11.50%
15.44%
1.83%
4.32%
0.42
13.11%
Cap 1000
9.67%
15.25%
Source: Research Affiliates, LLC. Based on data from CRSP and Compustat. THE INDEX DATA PUBLISHED HEREIN IS SIMULATED, UNMANAGED AND
CANNOT BE INVESTED IN DIRECTLY. PAST SIMULATED PERFORMANCE IS NO GUARANTEE OF FUTURE PERFORMANCE AND IS NOT INDICATIVE
OF ANY SPECIFIC INVESTMENT. ACTUAL INVESTMENT RESULTS MAY DIFFER.
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RAFI Global 2011Q2
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The Fundamental Index® Strategy
Performance
FTSE RAFI All World 3000 Cumulative Return
1988–June 2011
$1000
Growth of $1
(Logscale)
$100
Return
Volatility
Value Add
Tracking Error
Beta
Correl
R2
FTSE RAFI
All World 3000
11.90%
15.51%
4.18%
4.69%
0.95
0.95
0.91
MSCI All
Country World
7.71%
15.53%
$10
More than
twice the
end-point
wealth
$1
$0
1987
1990
1993
1996
FTSE RAFI All World 3000
1999
2002
2005
2008
MSCI AC World
Source: Research Affiliates, based on data from Bloomberg. The FTSE RAFI AW 300 Index launched on 10/06/2008. Index returns prior to launch are simulated. THE
INDEX CANNOT BE INVESTED IN DIRECTLY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE PERFORMANCE AND IS NOT INDICATIVE OF ANY SPECIFIC
INVESTMENT. ACTUAL INVESTMENT RESULTS MAY DIFFER.
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RAFI Global 2011Q2
©Research Affiliates, LLC
FTSE RAFI AW 3000 vs. Cap-Weight
Three-Year Returns: 1988–June 2011
FTSE RAFI AW 3000 3-Year Annualized Return
35%
For Cap Return
< 0%, RAFI
adds value in
100% of all cases
30%
25%
For Cap Return
0-10%, RAFI
adds value in
100% of all cases
20%
15%
10%
5%
0%
For Cap Return
10-20%, RAFI
adds value in
76% of all cases
-5%
-10%
For Cap Return
> 20%, RAFI
adds value in
80% of all cases
-15%
-20%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
MSCI AC World 3-Year Annualized Return
Source: Research Affiliates, based on data from Bloomberg. The FTSE RAFI AW 300 Index launched on 10/06/2008. Index returns prior to launch are simulated. THE
INDEX CANNOT BE INVESTED IN DIRECTLY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE PERFORMANCE AND IS NOT INDICATIVE OF ANY SPECIFIC
INVESTMENT. ACTUAL INVESTMENT RESULTS MAY DIFFER.
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RAFI Global 2011Q2
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Wins and Losses: FTSE RAFI AW 3000
Ann. Rolling Three-Year Returns, 1988–June 2011
FTSE RAFI AW 3000 vs. MSCI AC World
RAFI Underperforms in Irrational Bubbles
FTSE RAFI AW 3000 minus MSCI AC World
3-Year Rolling
15%
10%
5%
0%
Technology
Bubble
-5%
-10%
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
FTSE RAFI Outperforms MSCI AC World
MSCI AC World Outperforms FTSE RAFI
Source: Research Affiliates, based on data from Bloomberg. The FTSE RAFI AW 300 Index launched on 10/06/2008. Index returns prior to launch are simulated. THE
INDEX CANNOT BE INVESTED IN DIRECTLY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE PERFORMANCE AND IS NOT INDICATIVE OF ANY SPECIFIC
INVESTMENT. ACTUAL INVESTMENT RESULTS MAY DIFFER.
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RAFI Global 2011Q2
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The Fundamental Index Concept Works Globally
23 Country Returns, June 2011
FTSE RAFI
Country
Return
Austria
16.1%
Ireland
7.5%
Japan
0.1%
France
14.4%
Portugal
9.7%
Hong Kong
19.0%
Germany
12.0%
Canada
12.5%
Norway
13.3%
Spain
13.1%
Singapore
10.2%
Italy
11.7%
United Kingdom
12.8%
United States
12.7%
Greece
11.0%
Australia
13.1%
Sweden
15.2%
Finland
11.0%
Belgium
10.9%
Netherlands
11.0%
Switzerland
9.8%
Denmark
9.1%
New Zealand
2.8%
23-Country Average
13.5%
MSCI
Return
8.5%
2.9%
-4.3%
10.6%
5.9%
15.7%
8.9%
9.5%
10.6%
10.5%
7.9%
9.5%
10.6%
10.6%
9.2%
11.4%
13.7%
9.6%
10.0%
10.3%
9.5%
9.7%
5.0%
10.9%
Value
Added
7.6%
4.6%
4.4%
3.8%
3.8%
3.2%
3.1%
3.0%
2.8%
2.6%
2.3%
2.2%
2.1%
2.1%
1.8%
1.7%
1.5%
1.5%
0.9%
0.7%
0.3%
-0.5%
-2.2%
2.5%
Tracking Info
Alpha
Error
Ratio t -statistic
9.0%
0.85
4.66
23.7%
0.20
0.98
4.3%
1.02
3.38
6.1%
0.63
3.40
12.1%
0.31
1.78
5.8%
0.55
3.12
5.3%
0.59
3.91
6.2%
0.48
3.90
7.5%
0.37
1.88
4.4%
0.60
3.87
6.6%
0.34
1.84
5.4%
0.40
2.04
4.5%
0.48
2.36
4.9%
0.43
3.04
12.6%
0.14
0.52
4.2%
0.40
2.87
8.7%
0.18
1.49
16.8%
0.09
1.06
7.8%
0.11
0.90
9.8%
0.08
-0.06
4.6%
0.06
0.29
10.1%
-0.05
-0.16
9.3%
-0.23
-1.16
3.3%
0.77
3.90
Start
Date
1984
1988
1984
1984
1989
1984
1984
1984
1984
1988
1988
1984
1984
1984
1989
1984
1984
1988
1984
1984
1984
1984
1988
1984
Note: 23- Country Average values are determined from the return series of the average country, not the average of each respective statistic in the above table.
Source: Research Affiliates, LLC. Based on data from Bloomberg. The FTSE RAFI US 1000 country indexes launched on 11/28/2005. Index returns prior to launch are simulated.
THE INDEX CANNOT BE INVESTED IN DIRECTLY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE PERFORMANCE AND IS NOT INDICATIVE OF ANY SPECIFIC
INVESTMENT. ACTUAL INVESTMENT RESULTS MAY DIFFER.
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RAFI Global 2011Q2
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Rolling Three-Year Returns, 23 Countries
June 2011
40%
RAFI Annualized 3-Year Return
35%
30%
For Cap Return
< 0%, RAFI
adds value in
89% of all cases
For Cap Return
0-10%, RAFI
adds value in
81% of all cases
25%
20%
15%
10%
5%
For Cap Return
10-20%, RAFI
adds value in
71% of all cases
0%
-5%
-10%
-10%
-5%
0%
5%
10%
15%
For Cap Return
> 30%, RAFI
adds value in
50% of all cases
For Cap Return
20-30%, RAFI
adds value in
62% of all cases
20%
25%
30%
35%
40%
MSCI Annualized 3-Year Return
Other Developed
G5
Average
Linear (Average)
Source: Research Affiliates, LLC. based on data from Bloomberg. Start dates for each country represented in the following graph is available on Slide 20. The FTSE RAFI country indexes
launched on 11/28/2005. Index returns prior to launch are simulated. THE INDEX CANNOT BE INVESTED IN DIRECTLY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE
PERFORMANCE AND IS NOT INDICATIVE OF ANY SPECIFIC INVESTMENT. ACTUAL INVESTMENT RESULTS MAY DIFFER.
40
RAFI Global 2011Q2
©Research Affiliates, LLC
Fundamental Index Performance During Global
Financial Crisis
Does not outperform in every bear market
■ When markets punish deep value stocks in favor of growth
● Not typical of bear markets, which normally savage growth stocks
Alpha recovery occurs when prices correct
■ Correction of irrational exuberance in stocks (tech bubble)
● Fundamental Index strategy typically outperforms by a wide margin
■ Macroeconomic reasons (energy crisis, financial crisis)
● Fundamental Index strategy typically on par with cap-weighted benchmarks
Fundamental Index advantage comes from:
■ Avoiding overreactions to irrational anti-bubbles
■ Trading into the least favored companies
41
RAFI Global 2011Q2
©Research Affiliates, LLC
Bear Markets1 When Fundamental Index
Portfolio Underperformed During the Decline
Peak to Trough
Full Cycle
Returns3
2
Trough
Credit Crunch '66
Jan-66
Sep-66
-16%
-15%
50%
43%
26%
21%
Credit Crunch '69
Nov-68
May-70
-24%
-22%
47%
53%
11%
19%
Gulf War
Jun-90
Oct-90
-18%
-15%
55%
47%
27%
25%
Financial Crisis
Oct-07
Feb-09
-55%
-50%
129%
88%
4%
-6%
Peak
2
24 Months
After Trough
RAFI
S&P 500
RAFI
S&P 500
RAFI
S&P 500
1
We present only significant bear markets w here the Fundamental Index portfolio underperformed during the decline. The above sample excludes bear markets
w hen the Fundamental Index portfolio outperformed in decline: Dec 1972-Sept 1974; Nov 1980-Jul 1982; Aug 1987-Nov 1987; Mar 2000-Sep 2002.
2
Based on S&P 500 cumulative performance.
3
Peak through 24 months after trough.
Source: Research Affiliates, LLC. Based on data from Bloomberg. The FTSE RAFI US 1000 Index launched on 11/28/2005. Index returns prior to launch are simulated. THE INDEX
CANNOT BE INVESTED IN DIRECTLY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE PERFORMANCE AND IS NOT INDICATIVE OF ANY SPECIFIC INVESTMENT.
ACTUAL INVESTMENT RESULTS MAY DIFFER.
42
RAFI Global 2011Q2
©Research Affiliates, LLC
Performance Across Markets
June 2011
% 3-Year
Wins
73.9%
Start Date
1962
2.5%
91.5%
1984
19.5%
19.9%
4.0%
95.5%
1979
13.5%
9.1%
15.7%
15.6%
4.4%
90.5%
1984
15.7%
6.9%
25.5%
24.3%
8.8%
99.4%
1994
Annualized
Return
11.5%
9.4%
Annualized
Volatility
15.4%
15.1%
FTSE RAFI - 23 Country Average
MSCI - 23 Country Average
13.5%
10.9%
16.3%
15.8%
FTSE RAFI U.S. Mid-Small 1500
Russell 2000
15.5%
11.5%
FTSE RAFI All World 3000
MSCI All Country World
FTSE RAFI EM
MSCI EM
FTSE RAFI US Large
S&P 500
Annualized
Value Add
2.1%
Source: Research Affiliates, LLC. based on data from Bloomberg. The 23-Developed Countries correspond to the country study exhibited on slide 20. Index data prior to launch date is
simulated. Launch date: FTSE RAFI US 1000 (11/28/2005), FTSE RAFI Country Indexes (11/28/2005), FTSE RAFI US MS 1500 (5/4/2006), FTSE RAFI AW 3000 (10/06/2008), FTSE
RAFI EM (7/9/2007). THE INDEX CANNOT BE INVESTED IN DIRECTLY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE PERFORMANCE AND IS NOT INDICATIVE OF
ANY SPECIFIC INVESTMENT. ACTUAL INVESTMENT RESULTS MAY DIFFER.
43
RAFI Global 2011Q2
©Research Affiliates, LLC
Further Validation of the
Fundamental Index® Concept
RAFI Fixed Income Performance
Through June 2011
Annual
Return
9.0%
Annual
Volatility
9.2%
Sharpe
Ratio
0.72
Merrill Lynch High Yield
6.3%
9.4%
0.41
RAFI Developed
Sovereign Debt2
Merrill Lynch Global
Government Bond Index II
6.6%
6.8%
0.55
6.0%
7.1%
0.45
12.3%
11.7%
0.80
10.3%
13.3%
0.56
Fixed Income
RAFI High Yield1
RAFI Emerging
RiskAdjusted
Value Add
Alpha
2.7%
3.0%
Tracking
Error
2.7%
IR of
Alpha
1.14
0.6%
0.8%
2.1%
0.42
2.0%
3.2%
4.7%
0.79
3
Markets (Rescaled)
Merrill Lynch EM Sovereign
Plus (IGOV) Index
1
1-10 Yr BB-B, inception year 2000
Inception year 1997
3
Inception year 1997
2
Metrics:
High yield bonds: sales, cash-flow, gross dividends, book value of assets
Developed Sovereign: area, population, GDP, energy consumption
Emerging Market debt: area, population, GDP, energy consumption
Sources: For RAFI High-Yield indices: Research Affiliates LLC based on indices calculated by Ron Ryan ALM (www.ryanalm.com). RAFI HY 1–10 is the Research Affiliates FixedIncome High-Yield Index of 1 to 10 years maturity. ML HY 1–10 is the U.S. High-Yield, BB-B rated, 1-10 years (H5A4 Index), published by Merrill Lynch. THE INDEX DATA
PUBLISHED HEREIN IS SIMULATED, UNMANAGED, AND CANNOT BE INVESTED IN DIRECTLY. PAST SIMULATED PERFORMANCE IS NO GUARANTEE OF FUTURE
PERFORMANCE AND IS NOT INDICATIVE OF ANY SPECIFIC INVESTMENT. ACTUAL INVESTMENT RESULTS MAY DIFFER.
45
RAFI Global 2011Q2
©Research Affiliates, LLC
RAFI REIT Performance
Through June 2011
RiskAdjusted Tracking
Error
Alpha
IR of
Alpha
Annual
Return
Annual
Volatility
Sharpe
Ratio
Value
Add
FTSE RAFI US 100 Real
1
Estate
13.7%
20.8%
0.45
4.5%
4.1%
9.4%
0.44
FTSE NAREIT Composite
9.2%
17.1%
0.28
FTSE RAFI Global ex US
2
Real Estate
10.2%
21.1%
0.33
3.2%
3.4%
8.8%
0.38
7.0%
20.1%
0.19
FTSE EPRA/NAREIT Index
1
Start Date: 1/1/1984
2
Global, excluding North America, start date 1/1/ 1994
Metrics: sales, dividends, assets & adjusted funds from operations
Source: Research Affiliates, LLC. Based on data from Worldscope, Datastream, CRSP, Compustat and Bloomberg. THE INDEX DATA PUBLISHED HEREIN IS SIMULATED,
UNMANAGED AND CANNOT BE INVESTED IN DIRECTLY. PAST SIMULATED PERFORMANCE IS NO GUARANTEE OF FUTURE PERFORMANCE AND IS NOT INDICATIVE OF ANY
SPECIFIC INVESTMENT. ACTUAL INVESTMENT RESULTS MAY DIFFER.
46
RAFI Global 2011Q2
©Research Affiliates, LLC
RAFI vs. GDP Performance
1984–June 2011
GDP
Annual
Return
Annual Sharpe
Volatility Ratio
Value
Add
RiskAdjusted Tracking
Alpha
Error
FTSE RAFI Developed 10001
12.6%
15.4%
0.53
2.6%
2.9%
4.8%
GDP Weighted2
10.7%
15.6%
0.40
0.7%
0.7%
2.6%
MSCI World
10.0%
15.5%
0.36
1
Inception Year 1984
2
GDP-weighted countries, cap-weighted within countries
Source: Research Affiliates, LLC. Based on data from Global Financial Data and Bloomberg. THE INDEX DATA PUBLISHED HEREIN IS SIMULATED, UNMANAGED AND CANNOT BE
INVESTED IN DIRECTLY. PAST SIMULATED PERFORMANCE IS NO GUARANTEE OF FUTURE PERFORMANCE AND IS NOT INDICATIVE OF ANY SPECIFIC INVESTMENT.
ACTUAL INVESTMENT RESULTS MAY DIFFER.
47
RAFI Global 2011Q2
©Research Affiliates, LLC
The Fundamental Index® Strategy
Characteristics
Largest Holdings—Developed 1000
June 2011
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
FTSE RAFI Developed 1000
Company
Weight
Exxon Mobil
1.5%
AT&T
1.2%
BP
1.2%
ING Groep
1.1%
General Electric
1.0%
Chevron
0.9%
Bank of America
0.9%
Total
0.9%
HSBC
0.9%
Royal Dutch Shell - A
0.8%
Vodafone
0.8%
Pfizer
0.8%
J P Morgan Chase
0.8%
Citigroup
0.8%
Wal Mart
0.8%
Verizon Communications
0.7%
Banco Santander
0.7%
Conocophillips
0.7%
Royal Dutch Shell - B
0.7%
Telefonica
0.6%
Top 20 Total
17.7%
FTSE All World Developed
Company
Weight
Exxon Mobil
1.3%
Apple
1.0%
Microsoft
0.7%
Nestle
0.7%
IBM
0.7%
Chevron
0.7%
General Electric
0.6%
AT&T
0.6%
Johnson & Johnson
0.6%
Procter & Gamble
0.6%
HSBC
0.6%
Oracle
0.5%
Pfizer
0.5%
J P Morgan Chase
0.5%
Coca Cola
0.5%
Novartis
0.5%
BHP Billiton
0.5%
Wells Fargo
0.5%
Wal Mart
0.4%
BP
0.4%
Top 20 Total
12.4%
Source: Research Affiliates, based on data from FTSE and Wilshire Atlas.
49
RAFI Global 2011Q2
©Research Affiliates, LLC
Sector Weights: Developed Large Companies
Rolling 12-Month Averages: 1984–June 2011
Simulated RAFI Target Weight
100%
100%
90%
90%
80%
80%
Portfolio Composition
Portfolio Composition
Cap Weighted
70%
60%
50%
40%
30%
70%
60%
50%
40%
30%
20%
20%
10%
10%
0%
1984
1988
1992
1996
2000
2004
2008
0%
1984
1988
1992
1996
2000
2004
2008
Other
Manu
Enrgy
Dur
Tech
Utils
Other
Manu
Enrgy
Dur
Tech
Utils
Telcom
Finance
Non-Dur
Retail
Health
Chem
Telcom
Finance
Non-Dur
Retail
Health
Chem
Source: Research Affiliates, LLC. Based on data from CRSP and Compustat. THE INDEX DATA PUBLISHED HEREIN IS SIMULATED,
UNMANAGED AND CANNOT BE INVESTED IN DIRECTLY. PAST SIMULATED PERFORMANCE IS NO GUARANTEE OF FUTURE
PERFORMANCE AND IS NOT INDICATIVE OF ANY SPECIFIC INVESTMENT. ACTUAL INVESTMENT RESULTS MAY DIFFER.
50
RAFI Global 2011Q2
©Research Affiliates, LLC
Country Weights: All World 3000
Rolling 12-Month Averages: 1984–June 2011
Simulated RAFI Target Weight
100%
100%
90%
90%
80%
80%
Portfolio Composition
Portfolio Composition
Cap Weighted
70%
60%
50%
40%
30%
70%
60%
50%
40%
30%
20%
20%
10%
10%
0%
1984
1988
1992
1996
2000
2004
2008
United States
Canada
United Kingdom
Germany
France
Italy
Other Europe
Dev. AP ex Japan
Japan
EM
0%
1984
1988
1992
1996
2000
2004
2008
United States
Canada
United Kingdom
Germany
France
Italy
Other Europe
Dev. AP ex Japan
Japan
EM
Source: Research Affiliates, LLC. Based on data from CRSP, Compustat, Datastream, and Worldscope. THE INDEX DATA PUBLISHED HEREIN
IS SIMULATED, UNMANAGED AND CANNOT BE INVESTED IN DIRECTLY. PAST SIMULATED PERFORMANCE IS NO GUARANTEE OF
FUTURE PERFORMANCE AND IS NOT INDICATIVE OF ANY SPECIFIC INVESTMENT. ACTUAL INVESTMENT RESULTS MAY DIFFER.
51
RAFI Global 2011Q2
©Research Affiliates, LLC
The Fundamental Index® Strategy
Attribution
Outperforms Core & Value
1997–June 2011
FTSE RAFI AW 3000 vs. MSCI AC World and MSCI AC World Value
$100
Growth of $1
(Logscale)
$10
Return
Volatility
Value Add
Tracking Error
Beta
Correl
R2
FTSE RAFI
All World 3000
10.68%
17.54%
4.73%
5.10%
1.00
0.96
0.92
MSCI AC
World Value
6.47%
17.08%
0.52%
4.14%
0.98
0.97
0.94
MSCI All
Country World
5.94%
16.86%
$1
$0
1996
1998
2000
FTSE RAFI All World 3000
2002
2004
MSCI AC World
2006
2008
2010
MSCI AC World Value
Source: Research Affiliates, LLC., based on data from Bloomberg, THE INDEX DATA PUBLISHED HEREIN IS SIMULATED, UNMANAGED AND CANNOT BE
INVESTED IN DIRECTLY. PAST SIMULATED PERFORMANCE IS NO GUARANTEE OF FUTURE PERFORMANCE AND IS NOT INDICATIVE OF ANY
SPECIFIC INVESTMENT. ACTUAL INVESTMENT RESULTS MAY DIFFER.
53
RAFI Global 2011Q2
©Research Affiliates, LLC
Exposure to Value is Dynamic
FTSE RAFI Developed 1000, 1986–June 2011
Value Tilt–Rolling regression coefficient of Simulated RAFI Developed 1000 against Simulated Developed Cap-Weight Value minus Simulated Developed CapWeight Growth.
Source: Research Affiliates, LLC. THE INDEX DATA PUBLISHED HEREIN IS SIMULATED, UNMANAGED AND CANNOT BE INVESTED IN DIRECTLY. PAST
SIMULATED PERFORMANCE IS NO GUARANTEE OF FUTURE PERFORMANCE AND IS NOT INDICATIVE OF ANY SPECIFIC INVESTMENT. ACTUAL
INVESTMENT RESULTS MAY DIFFER.
54
RAFI Global 2011Q2
©Research Affiliates, LLC
Dynamic Attribution Analysis
Simulated RAFI All World 3000 (1984–June 2011)
Total Value Added
Average Tilts
Dynamic Tilts
Sector Allocation
Average Sector Exposure
Dynamic Sector Exposure
Style: Growth vs. Value
Average Value Exposure
Dynamic Value Exposure
Style: Small vs. Large
Average Size Exposure
Dynamic Size Exposure
Country Allocation
Average Country Exposure
Dynamic Country Exposure
Stock Selection
4.35%
0.86%
3.48%
0.24%
-0.04%
0.28%
1.88%
0.72%
1.15%
0.00%
0.06%
-0.06%
1.37%
Simulated RAFI US 1000 (1962–June 2011)
Total Value Added
Average Tilts
Dynamic Tilts
Sector Allocation
Average Sector Exposure
Dynamic Sector Exposure
Style: Growth vs. Value
Average Value Exposure
Dynamic Value Exposure
Style: Small vs. Large
Average Size Exposure
Dynamic Size Exposure
Stock Selection
2.15%
0.59%
1.56%
0.47%
-0.05%
0.51%
1.16%
0.44%
0.72%
0.45%
0.20%
0.25%
0.07%
0.12%
1.25%
0.85%
Source: Research Affiliates, LLC. Based on research conducted by Research Affiliates, LLC for the periods indicated in the tables above. The analysis displays value added attribution of
simulated RAFI AW 3000 against a simulated Cap-Weight All World 3000 Index and simulated RAFI US Large vs S&P 500 Index. Returns are in USD. Source data provided by CRSP,
Compustat, Datastream and Worldscope. Hypothetical or simulated performance results have certain inherent limitations and do not represent actual trading. Past simulated performance
is no guarantee of future results.
The Dynamic Attribution Analysis displayed above is described in the following paper: Hsu, Jason C., Kalesnik, Vitali and Myers, Brett W., “Performance Attribution: Measuring Dynamic
Allocation Skill,” (March 26, 2010). Available at SSRN: http://ssrn.com/abstract=1578934
55
RAFI Global 2011Q2
©Research Affiliates, LLC
Research Affiliates
FTSE RAFI® Index Performance
Fundamental Index Performance
7/31/2011
3 Month
FTSE RAFI All World 3000
MSCI All World
Value Added
FTSE RAFI US 1000
Russell 1000
Value Added
FTSE RAFI US MS 1500
Russell 2000
Value Added
FTSE RAFI Developed ex-US 1000
MSCI EAFE
Value Added
FTSE RAFI Dev. ex-US MS 1500
MSCI EAFE Small
Value Added
FTSE RAFI Emerging Markets
MSCI Emerging Markets
Value Added
-6.8%
-5.1%
-1.7%
-6.3%
-4.9%
-1.4%
-7.0%
-7.6%
0.6%
-7.7%
-5.5%
-2.2%
-2.3%
-5.1%
2.7%
-5.1%
-4.4%
-0.7%
1 Year
17.1%
19.0%
-1.8%
18.4%
20.7%
-2.3%
23.8%
23.9%
-0.1%
16.1%
17.7%
-1.6%
24.6%
24.7%
0.0%
15.7%
17.8%
-2.1%
3 Year
4.8%
1.8%
2.9%
7.3%
3.3%
4.0%
11.9%
5.2%
6.7%
1.6%
-0.7%
2.4%
10.4%
4.9%
5.5%
7.5%
5.7%
1.8%
Since Launch
Launch Date
14.3%
12.0%
2.3%
4.5%
2.9%
1.6%
5.4%
1.9%
3.5%
5.8%
4.0%
1.8%
3.4%
-1.8%
5.2%
5.6%
3.1%
2.5%
10/6/2008
11/28/2005
5/4/2006
11/28/2005
8/6/2007
7/9/2007
Note: The index version of the RAFI methodology, or the FTSE RAFI Indexes, is licensed globally by our partner the FTSE Group. All returns are Total Returns
in USD. This material relates only to a hypothetical model of past performance of the Fundamental Index® strategy itself, and not to any asset management
products based on this index. No allowance has been made for trading costs or management fees which would reduce investment performance. Actual
results may differ. Indexes are not managed investment products, and, as such cannot be invested in directly. Returns represent performance based on
rules used in the creation of the index, are not a guarantee of future performance and are not indicative of any specific investment. Returns listed prior to the
individual indexes launch dates are simulated.
Source: Research Affiliates, LLC., based on data from Bloomberg.
57
RAFI Global 2011Q2
©Research Affiliates, LLC
Fundamental Index Strategies
Attractive Relative Equity Valuations
7/31/2011
Price / Sales
FTSE RAFI All World 3000
FTSE All World
RAFI Discount
FTSE RAFI US 1000
Russell 1000
RAFI Discount
FTSE RAFI US MS 1500
Russell 2000
RAFI Discount
FTSE RAFI Developed ex-US 1000
FTSE Developed ex-US
RAFI Discount
FTSE RAFI Dev. ex-US MS 1500
FTSE Developed Small ex-US 1500
RAFI Discount
FTSE RAFI Emerging Markets
FTSE Emerging Markets
RAFI Discount
0.65
0.99
-34%
0.84
1.35
-38%
0.80
1.02
-22%
0.55
0.82
-33%
0.50
0.64
-22%
0.65
0.89
-27%
Price / Book
1.33
1.71
-22%
1.63
2.09
-22%
1.55
1.80
-14%
1.15
1.43
-20%
1.09
1.38
-21%
1.50
1.94
-23%
Dividend
Yield
3.0%
2.7%
-13%
2.3%
1.9%
-14%
1.2%
1.3%
11%
3.6%
3.2%
-12%
2.5%
2.3%
-7%
3.2%
2.7%
-16%
Weighted Average
Market Cap
$56.4 billion
$63.4 billion
$74.5 billion
$81.2 billion
$1.6 billion
$1.2 billion
$49.1 billion
$48.8 billion
$2.7 billion
$2.1 billion
$38.3 billion
$35.2 billion
Note: The index version of the RAFI methodology, or the FTSE RAFI Indexes, is licensed globally by our partner the FTSE Group.
Indexes are unmanaged and cannot be invested in directly.
Source: Research Affiliates, LLC., based on data from Wilshire Atlas.
58
RAFI Global 2011Q2
©Research Affiliates, LLC
The Fundamental Index® Strategy
Enhancements
What Do We Do in Enhanced RAFI?
Objective
■ Seek to enhance Fundamental Index return advantage over S&P 500
by 50–100 bps with minimal pick-up in tracking error
Process
■ Constantly scan for promising new ideas
● Review leading research journals
● Participate in academic and practitioner conferences
■ Rigorously examine and test promising new ideas
●
●
●
●
60
RAFI Global 2011Q2
Determine economic and behavioral rationale for excess return
Gauge robustness and statistical significance using econometric methods
Determine additional trading costs and weigh in light of excess return
Assess impact on other enhancements and Fundamental Index strategy
advantage
©Research Affiliates, LLC
Enhancements to the Fundamental Index
Methodology
Quality of Corporate Earnings
■ Reduce weights in companies that use aggressive accounting
■ Use net operating assets ratio
Financial Distress Risk
■ Reduce weights in companies that are closer to default
■ Use debt coverage ratio
Signal Diversification
■ Reduce the big active weights of the largest cap-weighted stocks
■ Use proprietary methodology
61
RAFI Global 2011Q2
©Research Affiliates, LLC
Efficient Indexing for an Inefficient Market
Cap-weighting has a rich history… and a flaw
The Fundamental Index concept improves on cap
weighting
■ Addresses the shortcomings of cap weighting while maintaining the
benefits of a broad market index
■ Generally outperforms its cap-weighted counterparts
■ Adds more value as pricing errors increase (i.e., in markets like
emerging markets, international, and small cap)
62
RAFI Global 2011Q2
©Research Affiliates, LLC
Agenda
Cidel Overview
Investment Management
Captive Platform Overview
Investment Platforms
Service Model
Why Cidel?
For information purposes only and not for public use
63
Service
• Dedicated Investment Manager, Relationship Manager and Account
Representative
• Single account with bank and investment subs
• Online access
• Streamlined due diligence process
• Robust reporting
• Flexible infrastructure
64
International Investment Platform
Cidel offers a a unique open architecture investment platform that meets
the needs of clients and advisors worldwide
Consolidated portfolio reporting
Features and Benefits:
• Consolidated reporting
• Flexibility
• Transparency
• Accessibility
• Liquidity
• Safety
For information purposes only and not for public use
65
International Investment Platform
Consolidated report
of all asset classes
Multiple holding types
across multiple currencies
For information purposes only and not for public use
66
Agenda
Cidel Overview
Investment Management
Captive Platform Overview
Investment Platforms
Service Model
Why Cidel?
For information purposes only and not for public use
67
Why Cidel?
• Largest provider of wealth management services to the international
sector in Barbados
• Dedicated service team in most of key markets including Barbados
• Best-in-class managers
• Both passive and active management
• Tactical vs 100% strategic
• Advanced custody and reporting
• Credit by Scotia
• Custody by RBC Dexia
Market Commentary
•
•
•
•
•
Low interest rate environment
Widening credit spreads, corporate default risks, lower bond yields
Sovereign debt crisis
High volatility
Identify any risk factors that are likely to impact captives directly re:
claims or regulation
69
To understand where a person wants to be, you first have to know the person
Perhaps we should talk?
Cidel Barbados Captive Team:
Ryle Weekes
rweekes@cidel.com
Joy Aberback
jaberback@cidel.com
+1 246 430 5350
www.cidel.com
The material contained in this document is for information purposes only and is not intended as an offer or solicitation for purchase or sale of any
product or service, nor is it advice or a recommendation to enter into any transaction. We have endeavoured to offer current, accurate and clearly
expressed information. However, since inadvertent errors may occur, relevant legislation and regulations may change and/or the application of
laws and regulations may vary, the information may be neither current nor accurate. All individuals should obtain specific professional advice
with regard to the respective tax or other professional area. No action should be taken or omitted to be taken in reliance upon any of the
information provided and in no event shall Cidel Bank & Trust inc., its subsidiaries, its directors, principals, agents or employees be liable for
any direct, indirect, incidental, special, exemplary, punitive, consequential or other damages whatsoever including, but not limited to contract,
negligence or other tortuous actions arising out of or in connection with any content of the information provided or other use hereof.