IGM Financial Inc.

Yes. Thank you and good morning and welcome to IGM Financial's 2021 first quarter earnings call.

Joining me on the call today are James O'Sullivan, President and CEO of IGM Financial; Damon Murchison, President and CEO of IG Wealth Management; with Barry McInerney, President and CEO of Mackenzie Investments; and Luke Gould, Executive Vice President and CFO of IGM Financial. Before we get started, I'd like to draw your attention to the cautions concerning forward-looking statements on Slide 3 of the presentation.

On Slide 4, we summarizes non-IFRS financial measures used in this material. On Slide 5, we provide a list of documents that are available to the public on our website related to the first quarter results for IGM Financial.

And with that, I'll now turn it over to James O'Sullivan.

Okay. Well, good morning everyone.

Q1, 2021 was a record setting quarter for IGM. We achieved record assets under management and advisement in the quarter of $248.5 billion dollars up 3.6% in the quarter.

We also achieved record high total net flows of $2.2 billion with strength from IT Wealth Management and record high Q1 net sales at Mackenzie. IGM’s Q1 earnings per share were $0.85 also a record high of 25% from last year.

IGM published its seventh annual sustainability report yesterday, we continue to focus on areas that matter most to our business and stakeholders. Finally, we're thrilled with the growth of Wealthsimple and the value that it has been creating for our shareholders.

It's incredible really how much the company has grown since the fundraising around in October 2020. And as announced this past Monday, the value of our interest has grown by approximately $900 million, which is equal to $3.78 per IGM share pre-tax.

I'll speak more to this in a few moments. Turning to Slide 8 on investment returns, we continue to see strong equity market increases across major indices, while fixed income returns turn negative with the sharp increase in interest rates experienced in the quarter.

Overall IGM’s average client investment return was 2.7% in the first quarter and 4.4% year-to-date, April 30, 2021. To this point, the markets have shrugged-off the COVID third wave as governments continue to provide stimulus and market participants anticipate an economic rebound as vaccines roll-out.

While the pandemic is certainly not over as we get hit by the third wave here in Canada, there are reasons to be optimistic as more and more Canadians are vaccinated each day and we can envision getting back to something more normal in the near future. Turning to Slide 9, Q1 long-term mutual fund net sales were $38.8 billion for the total industry and $18.9 billion for industry asset manager peers.

This is the best fund industry Q1 net sales in Canadian history. Turning to Slide 10 on IGM’s results for the first quarter.

Average assets under management and advisement of $243.9 billion, increased $57.9 billion or 31.1% year-over -year including approximately $30 billion related to the acquisition of GLC and Greenchip which closed in December of last year. Q1, 2021 net earnings per share of $0.85 is a record high first quarter results for IGM representing a 25% increase relative to last year.

Slide 11 highlights earnings contributions from each of our segments where we have brought our disclosures down to the net earnings line as announced in March of this year. IGM’s year-over-year increase in net earnings was driven by strong results within wealth management and exceptional growth at Mackenzie and China AMC.

Our proportionate share of Great-West Lifeco earnings also increased meaningfully compared to Q1, 2020. Turning to Slide 12, IGM consolidated net flows were $2.2 billion during the first quarter.

A record high result driven by impressive net flows at both IG Wealth and Mackenzie investments. I believe this quarter's results demonstrate continued momentum in these businesses that Damon and Barry will speak to in greater detail in a few moments.

As I mentioned, we released IGM’s 2020 sustainability report yesterday, which can be found on the IGM Financial website. The report includes comprehensive information for you and your colleagues, and has been prepared in accordance with GRI standards.

Within the report, we also provide an index aligned to FASB disclosures and a greater and -- excuse me and the TCFD report. We're focused on the material ESG topics that matter most to IGM and our stakeholders with our strategy focused on building financial confidence growing sustainable investing and accelerating diversity, equity and inclusion in finance.

In 2021, we are also focused on furthering our role in combating climate change and implementation of the TCFD recommendations. We're proud to be recognized at a leadership level for CDP for the fourth year in a row and being named to Corporate Knights 2021 Global 100 most sustainable organizations.

I’m pleased to be leading a company where sustainability is integral to who we are and we are continually evolving what we do to make the greatest impact for our company and our stakeholders. Turning to Slide 14, Wealthsimple has experienced extraordinary growth over the past six months with a AUA increasing by 54% to $12.7 billion and clients growing more than two fold to over 1 million.

The equity raise has demonstrated the value being created for shareholders. That IGM’s interest valued at $1.45 billion, which is a compound annual return on investment of approximately 80% on our investment of $187 million.

As part of the fundraising round, we will be participating in a secondary offering with proceeds of approximately $295 million pre-tax and will continue to be the largest shareholder with a 23% fully diluted interest valued at $1.15 billion. Transaction accomplishes three key things.

One, it includes a new funding round that will support Wealthsimple’s strong momentum and growth. Two, it provides IGM the ability to monetize value for our shareholders, while remaining a significant owner of Wealthsimple and continuing to support the company as it creates additional value.

And three, the voting control is maintained by the Power group, which provides strategic flexibility. Proceeds from the transaction provide us with financial flexibility or dry-powder, which could be used for financially attractive acquisitions that bring new capabilities or access to distribution.

We would also look to share buybacks in the context of our overall capital allocation priorities and opportunities. The growth and evolution of Wealthsimple and our other strategic investments further reinforces the importance of applying some of the parts approach to valuing IGM.

Luke will expand on this in his remarks, but first I will turn the call over to Damon to review IG Wealth results.

Thank you, James. Turning to IG Wealth Management highlights for the first quarter of 2021 On Slide 16.

AUA increased 3.6% during the quarter to $1.7 billion driven by a combination of client investment returns of 2.6% and then net inflows of $1 billion. Net flows were the best result over two decades.

We saw record high on gross inflows with increased client productivity, which was driven by success in the mass affluent and high net worth segments of the market and net sales and IGM products were $713 million during the quarter a substantial improvement relative to net redemptions of $36 million during Q1 of last year. I also discuss the strong performance of our iProfile fee-based program and the recent enhancements including the expanded use of private market investments and alternative investment strategies.

Turning to Slide 17, this highlights our net flow results at IGM over the past decade on the left and you can see the strong net flows over $1 billion on the quarter. The chart on the bottom left and on the right demonstrates how our momentum which really started in early 2020 has continued into April with both net flows and net sales improving relative to recent years.

April is typically a seasonally slow month, but we had a record breaking month this year. Gross inflows of over a $1 billion even all time highs for the month of April.

And net inflows of $131 million is the best in 20 years and the third best all time. Turning to Slide 18.

Q1, 2021 gross inflows increased approximately 21% year-over-year to $3.6 billion the highest Q1 result in the history of the company. At the same time, our growth outflow rate improved from 11.2% to 10.2%.

You can see the substantial improvement on outflows and net sales and the IG Wealth Management Mackenzie products. I'll take a little bit of a deep dive on this on the next slide.

So let's turn there to Slide 19. On our last call, I'll walk through some of the changing dynamics in IGs offering our AUA and net flows growth and how AUA transitions to AUM.

Starting on the left part of the slide in the second column, you can see that Q1, 2021 net inflows of a $1 billion, which was comprised of $649 million of cash in short-term savings and $365 million of third-party in-kind transfers from other dealers. In the third column, during the same time period, we have seen significant outflow from these categories resulting a net sales into IG managed solutions, and Mackenzie funds totaling $713 million.

As we move forward, we expect deposit flows and in-kind transfers of third-party funds and securities from other dealers to continue to increase driven by new client acquisition increase share roll-up from our existing clients and recruitment of experienced industry advisors. Flowing into our managed solutions will also continue as consultants work with their clients to provide comprehensive financial planning and leverage the benefits of utilizing well constructed managed solutions.

Let’s turn to Slide 20, I'll touch on the productivity of consultant network and the key driving factors behind this trend. Both our consultant recruits and our experienced consultant practices delivered significant increases in productivity [indiscernible] relative to past years.

As we mentioned on prior calls, the success of our consultants are having is related to new client acquisitions within the mass affluent and high net worth segments on the market and increasing our share of assets with our existing clients. This quarter we have some impressive stats to share with you in this area as we look at our gross inflows through a new lens on the right hand part of the slide.

Inflows from households that over a $0.5 million or more with IG rose 30% year-over-year, and 76% relative to 2019. And within these figures, flows from new client acquisition nearly doubled over the past two years.

Q1, 2021 gross inflows from client relationships with less than 500,000 also increased by approximately 23% relative to two years ago with the vast majority of this increase coming from the $100,000 to $500,000, mass affluent segment. These are great results for our consultant network and I'm very proud of the progress we made so far.

But even with these results, we are clearly still building momentum here as we continue to invest on our platform, our people and our capabilities. Now let's turn to Slide 21.

This slide highlights the recent enhancements to our iProfile private portfolios where we're building on historically strong performance. For context iProfile includes a series of fee-based solutions with approximately $22 billion in AUM that is well positioned and well positioned for the mass affluent and high net worth segments of the market.

Performance of the iProfile program has been quite strong but these assets have never been captured in our reporting performance information in the past. Starting in Q1 however this changes where iProfile performance is now being reported by Morningstar and included our MD&A.

As of March 31, 84% of the AUM in iProfile is rated four or five stars by Morningstar and 100%, three stars or better. We've been continually stepping up our gain as it relates to our product capabilities aimed at servicing the mass affluent high net worth segments of the market, iProfile has been a key focus of ours.

During the month of March, we announced the introduction of discretionary model portfolios that will be rebalanced as outlined in our investment policy statements specific to each client's investment goal. At the same time, we've added six new private tools that bring new tools in the program including expanded use of alternative investment strategies and private market investments.

This slide highlights an example of one of the model portfolios. Building on this, in April, we introduced a new private equity mandate within the U.S.

equity pool and announced commitments to Barclays Capital Opportunities Fund. Going forward, the discretionary model portfolios will include active asset allocation, public equity and fixed income securities, liquid alternatives and a range of private market investments including private real estate, private credit and private equity.

These solutions will continue to offer access to leading global asset managers like Mackenzie Investments in Northleaf Capital Partners. Last let's turn to Slide 22.

Having excellent products like iProfile is critical to our success. And these products are deployed with one goal in mind to fulfil the financial plan tailored to meet the needs and the goals of each of our respective clients.

As a reminder at IGM, we refer to our financial plans as IG Living Plan. And fulfilling an IG Living Plan requires more than just investment products.

Our estate planning, mortgages, cash management, insurance products and services are equally important. Consulting and quiet usage of these products was another highlight for this quarter with our insurance volumes and mortgage fundings, increasing 23% and 25% respectively for last year.

In addition, all-in-one HELOC origination volumes were up 56%. We will continue to see an emphasis on these areas and growth in these areas as part of the business going forward.

I will now turn it over to Barry McInerney.

Thank you, Damon and good morning, everyone. I'll begin my comments on Mackenzie’s Q1 results on Slide 24.

We’ve reached a new record high total AUM of 191.6 billion at the end of the quarter, driven by strong returns for our clients and all time high Q1 net sales of $1.5 billion. A record net sales reflect both strong Canadian retail investment fund industry flows, which also broke record during the quarter, and our continued ability to win market share for our competitors.

Q1 marked our 18th consecutive quarter a positive retail investment fund sales and the momentum continues to be broad based across asset classes and categories for both mutual funds and ETFs. We also achieved several important milestones to further build on the momentum of our sustainable investing offerings.

Elaborate on a subsequent slide along with a few highlights on our strategic relationship with Northleaf Capital Partners. Slide 25 highlights investment fund flows, which include adjustments for large fund allocation changes that can impact the comparability of results over time.

The chart on the top left compares Mackenzie's record breaking quarter to the last decade. You can see that our 2021 net sales results are a multiple of prior year’s.

This pace has continued into April with record high investment fund net sales of $539 million during the month and $6 billion on a 12-month trailing basis. Slide 26 presents Mackenzie's Q1, 2021 operating results.

Total mutual fund gross sales of $4.5 billion were up 23% year-over-year driven by our retail business. Mackenzie continues to gain market share as demonstrated by our long-term investment fund net sales rate, which was 8.1% at the end of April.

In terms of Morningstar ratings 49% of Mackenzie's AUM were four or five star rated funds, and 15 of our top 20 funds are rated four or five star for F Series. Turning to Slide 27.

Mackenzie's results in the retail channel have been very strong with first quarter investment fund net sales of $1.9 billion including $1.6 billion from mutual funds and $300 million, primarily from active and strategic beta ETFs. There are a few catalysts for our success, Mackenzie's top rated sales organization in the country, a wide ranging suite of investment products and solutions supported by both strong performance and innovation of our top 20 net selling funds in Q1 five were launched within the last one to two and a half years, which means they did not yet have Morningstar ratings and a very favorable retail operating environment that has only amplified had the opportunity for leading players, like Mackenzie.

Slide 28 outlines the breadth of our retail net sales strength across our investment boutiques, and the short-term investment performance dynamics that we've seen in recent months. After an extended period of outperformance of growth oriented funds, we win the strategies which were with value tilt beginning to outperform.

Our capabilities in the value space are represented by our Cundill and North American equity teams, while their value oriented products lag their growth peers previously, the recent shift in market dynamics has led to near-term outperformance by these two boutiques as measured by the six month asset weighted percentiles. Of course difficult to say where exactly markets go from here and whether value or growth will perform in the near-term Mackenzie were focused on being Canada's preferred global asset management solutions provider and business partner in our multi investment boutique structure positions as well to have relevant and strong performing investment products through various market cycles.

I would also note on this slide that we are seeing exceptional flows into sustainable investing which leads us to our next slide. Slide 29 highlights Mackenzie’s five growth catalysts that are reshaping the global asset management industry.

I'd like to highlight a few developments on the sustainable investing in private markets themes today. As we discussed on our last call, we acquired Greenchip Financial during December bringing in-house the strong capabilities behind our top performing environmental equity fund.

As of March 31, this team now manages over $1.4 billion. Building on this success we launched the Mackenzie Greenchip global balanced fund during April, the first environmentally themed balance fund available to cleaner retail advisors and investors.

This fund brings Greenchip’s capabilities to the important balance category now leverages our fixed income team to establish sustainable investing expertise. We also launched the Mackenzie global sustainable bond fund, one of just a handful sustainable fixed income products available in Canada today.

Also in the month of April, we established our second sustainability focused investment boutique. This new boutique will be led by Andrew Simpson, who has 20 years of experience in investment management and has played a pioneering role in the Canadian sustainable investing space.

Mackenzie’s approach to sustainable investing has provide Canadians who have the opportunity to invest with impact through funds designed to generate long-term competitive returns, while supporting positive ESG outcomes. We are working to strengthen the role of sustainability in our culture, corporate practices and every investment decision we make.

Our partnership and equity ownership in Northleaf represents a key part of our strategy in the alternative and private investment markets. We are excited about the excellent fundraising of $1.5 billion achieved by Northleaf to the Northleaf teams in the first quarter of this year.

And during March, we officially launched our Mackenzie private credit funds, which brings Northleaf’s private credit capabilities to Canadian retail in a new and exciting way. And we have concrete plans to launch additional private markets products in the near-term.

I will now turn things over to Luke.

On Page 32, you can see our EBIT and our EBIT margins by quarter. On the right I'd highlight in the very right column, that we had the full impact of the acquisitions of GLC in Q1 and Greenchip.

And the GLC transaction closed on New Year's Eve and delivered us a net $30 billion in additional data manage that is at lower weighted average fees. And as a consequence, you can see that the weighted average margin declined during the quarter.

You can see on the top right that we've normalized the margin to exclude the impact of the acquisition. And the margin was 46 basis points on this basis and was in line with last year and was a stable trend.

I'd also remind as you can see in the bottom left, Q1 are seasonally high quarter for expenses as promotional and processing expenses are higher as a result of the RSP season. I'd also remind that Q1 had seasonal weakness in revenues as our fees are expressed as an annual percentage of assets.

And we only have 90 days of revenue this quarter. Turning to Page 33, you can see consolidated statement of earnings and our $0.85 per share result up 25% from last year and in line with Q4.

A few quick points that highlight in the slide. First will be a reminder, if you look at the top row there, we've indicated the number of days and the period.

As mentioned in the last slide, because there were less days Q1 has a number of peculiarities that affected various line items. And I'm going to highlight more of that on the coming slide.

I would remind that revenues are accrued based upon number of days, so we get [indiscernible] of the annual revenue rate during this quarter. Second, if you look at the first highlight to in the middle of page, you'll see the business development expenses of $79 million are unchanged from last year and down $9 million from Q4.

I note that this is a bit below our full year guidance due to timing of promotional expenses. I'd also remind the Q4 expenses were elevated by about $10 million due to an increased Mackenzie sales compensation at the very end of the year.

As indicated last quarter, we’ve reset the bar on this compensation every year, and we raised the bar for 2021. And as a result, the expenses running at much lower levels.

I'd also remind that we've given that guidance, and you can find it in Page 42. That shows how this line is going to vary based upon sales activity and what you can expect that Mackenzie continues to achieve the type of growth that is putting on.

Third, if you look at the second highlight to in the middle of the page, you'll still consolidate the operations and support expenses are up $11.4 million or 5.9%. I remind you that this includes $6 million of impact from the GLC acquisition and also includes $1.5 million in higher pension expense that we disclosed last quarter was coming on.

Excluding these two items were up 2%, which is just a bit better than our full year guidance that we provided. As you can see in color point two on the right, we're keeping our full year expense guidance unchanged.

And we've provided that guidance on appendix Slide 43. Moving to Page 34, a few comments on our results by segments and by components.

The first as indicated by James our first quarter reporting delta net earnings line at the segments and component level. As mentioned to you on our March 11 call when we release this disclosure, we believe this change better reflects the business performance of the segments and enables to use PE and is also intended to encourage us some of the products approach to value as well as making sure positioning the different businesses against appropriate global peer groups.

I've also called [indiscernible] to a few noteworthy items. First as a reminder, as mentioned by James that the Wealthsimple offering and revaluation or a stake is $1.5 billion in value.

I remind you record this investment its fair value through other comprehensive income so there's no contribution to our earnings from Wealthsimple. Second, our secondary transaction will close at few days and will receive our $295 million in proceeds and will continue to have a $1.2 billion stake in the company.

I'd also highlight that China AMCs earnings are up 41% from last year. And we've highlighted here that they declared and we received in April our annual dividend which was $26.8 million.

This dividend doubled from last year as a result of the earnings growth as well as an increase dividend payout rate from 40% to 65%. Looking at the increase in net earnings by segment, I'd highlight the 49% growth in Mackenzie's earnings.

And this was up 42% excluding the impact of acquisitions. As you saw in Barry’s section Mackenzie's looks poised to continue net selling and retail at a rate of over 10% of our assets per year.

There's a lot of operating leverage in this business and we expect continued earnings growth at very healthy levels. At the bottom right we put a sticker on the value of these investments in strategic investments at $4.2 billion.

This is based on the trading value growth [indiscernible] shares our entry level PE of 17.5 times trying to asset management earnings, our purchase price for Northleaf and the carrying value of $1.5 billion on Wealthsimple and $291 million of excess capital that we hold in very safe and liquid investments. Turn to Page 35.

We reflected consensus analyst earnings estimates at the time, we had to press for IGM Financial of $3.81 for 2021. And we've shown the allocation these earnings estimates by segments and component much like we did March 11.

We've taken the share price of $44.75 when we went to press on this deck, and allocate it to these components by using our $4.2 billion assessment for strategic investments reviewing last slide and allocating the [indiscernible] IG Mackenzie proportionate with their earnings. You can see at the bottom we've circled the implied PE of IG Mackenzie, which on this basis is 8.4 times.

And then we've compared this 8.4 times to the average multiples of global publicly traded large cap wealth managers in the case of IG and asset managers in the case of Mackenzie. We've disclosed that these peers are trading on average at multiples of 15 times earnings, and we obviously we encourage you to look at the strong momentum in IG Mackenzie's earnings that are being put on right now.

Turning to Page 36. Just a few quick comments.

First, you can see that advisory fee and product and program fees rates are in line with expectations in guidance. I would comment on our asset based comp because of the peculiarity and how it's paid in the industry.

Unlike our revenues, asset based comp at IG Mackenzie is paid at 112 the annualized rate each month. What this means is that if someone estimated this compensation by multiplying the annual rate by 90 days, over 365 days, they'd understand this expense by about $2.7 million.

We present the rate here in both basis as actually paid, you can see the rate increase increased by about 0.6 basis points. And we would expect the rate to be around 47 basis points for the remainder of the year.

The reason for the slight increase in this line was there was a greater proportion of AUA is subject to this compensation, which means there's less cash less money market fund and less time to savings account in the base, which we don't pay at base comp plan. On Page 37.

You can see IG’s income statement with earnings of $110.5 million in the quarter. I make two comments.

First, you can see in other financial planning revenues. We had an increase of 15.8% year-over-year reflecting higher insurance and mortgage volumes, which Damon reviewed with you a few slides earlier.

I'd remind you that insurance is seasonal, and our peak sales season is Q4. So we view this year-over-year growth in Q1 is very encouraging.

And as Damon mentioned, our comprehensive financial plans are focused and we see significant opportunities for further increase in the use of insurance, lending and other banking products with their financial plans. Second, you can see our operations and support expenses are up 2% or $2 million from last year.

This is right in line with our guidance 0.5% growth plus the $1.5 million per quarter and pension expense that came on due to interest rate increases last year -- decreases last year. We've given a footnote at the bottom right, just to give you guys going forward that as a result of interest rate increases in the quarter, you'll see in our financial statements that the funded status of our pension improved by just over $100 million pre-tax in the first quarter.

I'd let you know that under the accounting requirements annual pension expense is set at the beginning of each year based upon the rates prevailing and assumptions prevailed at that point in time. But I would let you know that had the current rates been in effect at January 1, or 2021 pension expense would have declined by a $1 million, as opposed to increasing by $6.5 million.

We point this out as this is obviously tailwind for us moving beyond 2021 that you should be aware of. Moving to Page 38 we presented the net asset management fee rates for Mackenzie on the right hand side, you can see the impact of the GLC acquisition coming on during the quarter.

And the 53 basis points is right in line with expectations and guidance. We've also included the fee rate excluding the impact of the acquisition at 68.7 basis points.

And I just highlight to the rates down very slightly in that first quarter for a few of the same reasons discussed in the IG section. First, some dealers still continue to sell GLC and we had an increase in the payment of sales commissions and these are expenses incurred.

This is a $2 million increase from Q4 and is including this rate. Second, as mentioned earlier, the asset based comp is paid at a quarter of the annual rate versus 90 over 365 and this was worth another basis points of decline.

So very stable fee rates. And these fee rates are obviously being supported by the strength in retail.

On Page 39, you can see Mackenzie income statement $48 million in net earnings was an increase of 49% from last year and 18% from last quarter. As you look through the percent changes, you'll see the operating leverage and hearing the business given the extent of fixed expenses.

In the second point, you can see that operations and support expenses increased by $8.8 million from last year as guided last quarter $6 million of the increase with the GLC and Greenchip acquisitions. This does include purchase price amortization excluding this the expense was up to 3.7%, which is the lower full year guidance of 5%.

We also mentioned earlier business development expenses of $20 million are at the same level of Q1 of 2020. And I'd remind you that on Page 42 in the appendix we've given guidance on how this line item will vary based upon different levels of retail sales activity.

This concludes my comments. I'll open up to questions.

Hi, good morning. So I want to start with a question on investment performance.

One of the things that stood out to me was I noticed the proportion of fund assets that Mackenzie ranking above median on a trailing 12-month basis move from the high 70% range in Q4 to 22% in Q1, just wondering how I shouldn't interpret that. Was that have been related to a particularly strong period of relative performance in Q1, 2020 fully off that [DTM] trader or how would you attribute that sequential change?

Sure. Great question Nik.

And your right actions vary. So just quickly, so the short-term performance, you are right our Q1, 2020 was exceptionally strong.

And we actually with all of our boutiques collectively, we probably perform best at Mackenzie during down markets, choppy markets, which we certainly had in Q1, 2020 and into ‘20 -- into Q2 rather. And so we had historically high percentage of four or five star AUM.

Double edged sword, obviously, because our AUM our percentages might go up when the markets are choppy and downwards, and therefore consumer confidence is low and therefore flows are low. The markets are going one way, they have been mostly upwards, we might lag a bit with some of our performance.

But overall, if you look at our four or five star percentages it's actually 40% to 60% in terms of AUM over the long-term. And so we were at the high end first couple quarters last year and then we -- again, we dropped off at Q1, 2020 we're down about 49%, 50% which is actually above average and it's we're very comfortable at that level.

The -- if I may though on the long-term number, the percentage of five star has actually remained relatively consistent last several quarters. And as you know, the vast majority proponents of our [indiscernible] are going into our five star funds and into our no star funds.

As I mentioned in my remarks, because we've had success and launch of some really attractive new products that have yet to garner our Morningstar stock is less than three years old. And those flows have been very, very strong principally and there's 5 or 10 of them easily the top couple of -- as you probably know the global environmental by Greenchip and the Bluewater’s global balance.

They're both under three years old, and they are collectively up to about $2.3 billion in AUM. So obviously they come on board with their stars that numbers will go up but I think you've got about right the long-term is where we think we are roughly 46% at the mid midrange.

The five stars have held the four stars or come up a bit obviously with the math and someone like [indiscernible] a big fund but it toggles between three and four star if it goes up to four or five star when -- again markets are down because it's a really downside risk protected type of building block and then they lag that when markets are up. So very explainable in Slide 28 If you recall, you see the all the boutiques that we have these aren't all boutique these are the ones that [indiscernible] Mackenzie mutual funds.

And we've got probably the most broad array of styles probably of any manager in Canada and a particular note on the left as I mentioned are value oriented because see those numbers where their performance was par class six months and whereas been lagging obviously for quite some time as growth outperformed value and then you see a growth oriented which are still holding five star amazing particularly growth in Bluewater. But they have -- their performance is adhering to their style which they have has come off at that last six months or so.

So that we just rotate with advisors we have started having a lot of discussions advisors on value. Most of these teams are fundamental but our quantitative team you can see exceptional short-term performance that are coming back so it's really advantage to the -- to our model of multi boutique they are going to rotate different styles.

But really is important those stresses that are wholesales partner with advisors to help them build more enduring portfolios with building blocks and not pushing the hot product and we think all these value growth quite fundamental emerging market domestic and now halts all play and a really strong role collectively in a portfolio. Hope that answers your question.

Thank you.

No, that's helpful, very thorough. And then just switching gears on the Wealthsimple financing round.

Luke, I think you had alluded to the fact that the proceeds from the secondary offering you participated in will give me greater financial flexibility. But are they emerged for anything specific or are you comfortable holding a greater level of excess capital and balance sheet until you can find a suitable redeployment opportunity?

Does that takes --

It’s James. They're not earmarked for anything specific at this point Nik, M&A is clearly a possibility as our share buybacks and as we've said previously on M&A, we're attracted both to wealth management and to asset management.

We like wealth management because of its stability, the resiliency of the earnings profile. And any interest we had there would be -- that would be Canadian based and it would be skewed to high net worth.

On the asset management side. Barry has spoken regularly about his five growth leavers, China halts, retirement ETFs, SRI those are areas of potential interest.

And on share buybacks, what I'd say is we view it as -- it's an important tool. If it's done properly, it can be a driver of EPS and a driver of ROE.

And we wanted to we could file a normal course issuer bid pretty quickly. So we don't have specific plans at this time.

But we have a fair bit of financial capacity. And I think that's important to point out between unallocated capital, which is pushing $300 million before the secondary Wealthsimple proceeds senior debt capacity and potentially other stakes that could be -- that we have that could be monetized.

I think we've got a fair bit of dry powder and a lot of optionality in a market that is in an economy that is reflating.

Okay, thanks for taking the questions.

Thanks and good morning. First question Barry.

Just wanted to go back to the next question on the performance. And you mentioned the shift from growth to value.

If that plays out, are you able to capture at that churn? Just notice on Slide 28, the performance of your growth funds are quite a bit better than the value and your advisors look at the six months more or more on the three year numbers?

Great question. Yes.

So the way we present us with advisors and more and more, we're having some -- I think very thoughtful discussions with them. In that when you're again, building a portfolio, a well diversified portfolio really should have a role of both value and growth.

Now, as I mentioned in prior calls in Canada, we don't have style specific universes, the United States, United States has style specific universes. So value universe, a growth universe, a core universe.

In Canada, it's sometimes difficult to put value in a portfolio when it's underperformed for 10 years, because you're right there, all the value managers usually one star, so because it's the road, the style has been so pronounced the strong growth versus value, except, of course, last six months. But we've been saying this for over a couple of years now.

And to point to the fact that to take some gains off a table to rotate a bit back to value to have a more diversified portfolio it has been resonating. So I think it's been an educational process for last couple of years and it might take another couple of quarters.

But yes, to answer your question, we think we would benefit there's -- otherwise not very many value managers left. It's unfortunate.

I've been through this for 25 years now I am in the United States and the high tech boom of the late 90s, where value was dead, they were declining, which has never dead so it's a wonderful style, it offsets growth very well value was a little different nowadays than it was 20 years ago. But I think that there's a lot of interest in discussions we've had -- we're having right now with advisor the wholesalers to say listen, they are listening, the fact that they should rotate and put some more into value.

And have a nice bounce between value and growth. And we would actually -- we believe we were well positioned.

We have two very good value managers and our Cundill and our North American equity side. Not many of us had of the value managers left.

Ours are good, very good. stick their style.

And you should see -- you should start to see some flows coming into the value side in Canada in short order. So we'll see what we're, that's again, our portfolio construction lead sales process.

Here's you see well diversified portfolio. Here's how you put these building blocks together.

And there's good discussions going on right now and I think you're right, you'll see some value flows come for surely. You can see, for instance, the redemptions have really stopped.

There's no redemptions right now to value. It's just more of a sales issue with coming up to America equities.

And we think this is going to pop relatively soon. Thank you.

Great, thanks for the color. And the second question we've got for James, just when I look at Slide 34, one of the bigger discrepancies in carrying value and fair value is you're trying to China AMC asset.

We've seen the monetization personal capital Wealthsimple last week. What alternatives are you looking at on the China AMC side?

Sure. Well, that's an investment we're proud of.

That investment reflects to be frank 50 years of relationship building in China. And we very much view China AMC as a best-in-class asset, it's a -- I think it's a clear leader in their field.

And so when you bear in mind that the China represents the second largest equity market globally, the second largest bond market, I think Canadians are going to want exposure as part of a globally diversified portfolio that satisfies their retirement needs. So for all of those reasons, we like the asset, and we would in the fullness of time, consider more if that opportunity presented itself.

Okay. And then my last question, perhaps for Luke on Slide 42, where you give us the sensitivity of business development expense relative to Mackenzie's gross sales.

Just curious your crystal ball especially on the right bar charts there? What are you accruing for given strong sales?

And how should we think about this number for the balance of the year?

Great question. And if we continue to put in this growth, that there's going to be some variability from Q1 level.

And so we'll be assessing each quarter. If you look at what's being put on and we got April, we've now got a few days in May, we're heading to the right hand side of Page 42 there with -- it's certainly in our side that full year retail net sales could be $5 billion or even beyond that as we continue to work through the year.

And this variability is what you should accept,

And how should we think about you are accruing for that? Are you -- I guess, for Q1 occurring more on the left hand side?

And then as the year progresses, you'll see the numbers and then you move more to the -- is it going to be more…?

Great question. Great question.

For Q1, you can think for accrual being at about the $2.5 billion mark. And as we continue to get closer towards the $5 billion or beyond, we'll be assessing every quarter.

But what I wouldn't expect is something like the surprise we had in Q4, 2020 where we're truly it was just remarkable in November and December, and we had to make a significant accrual to reflect the increased sales being put on. This year is just stable, steady growth will be a [indiscernible] each quarter and it should be pretty predictable this year.

That's, helpful. I was looking for that $2.5 million number.

Okay. Thank you.

That's it for me.

Yes, welcome.

Yes, thanks very much. Good morning, everyone.

James, you said in your opening remarks, that you were thrilled with the growth that you saw well, simple. So I guess the question is, with you're thrilled with something, why do you sell it?

And then if the answer is well, that gives us flexibility to invest in distribution capabilities, then why not look to well simple and said great growth in AUA. So maybe you can share with us, what you're thinking there was in terms of why you sold down on an investment that you are thrilled with?

Well, we certainly are thrilled with that. And I think anyone in our position would be thrilled to have the holding in that company that we do Tom look at the growth in AUA look at the growth and clients.

I mean, they have proven to be a remarkably nimble, remarkably agile, open minded about how to compete digitally and financial services in Canada and they've -- I think they've just achieved an unprecedented level of success for a company if they are tied in this country. So, that's the basis of being thrilled.

And of course, the mark on our balance sheet is I suppose the ultimate reason to be thrilled because but was up $187 million investment is now marked prior to the secondary to $1.45 billion. But as, so but you asked a good question if you're thrilled, why sell?

And my answer would be prudence. I -- it is -- it just struck us as prudent to take some money off the table.

I spoke earlier to my view that the world is reflating, that there is a high degree of confidence in boardrooms across this country and, frankly across North America. And I think we could be in for a period here where there is a very, very significant level of M&A opportunity in wealth management and asset management.

And so the proceeds of that sale after tax $260 million, we add those to our unallocated capital and our senior debt capacity. And as I said, we've -- this gives us dry powder, and it's going to give us I don't worry about our ability to deploy capital, I think if our thesis is right, there's going to be an opportunity to deploy this and do some great things for our shareholders.

So deeply proud of, well, simple, we've taken a little bit of money off the table, we continue to be the largest shareholder, it continues to be controlled by the group. And that overall, Tom just struck us as kind of the right balance.

But yes, we're thrilled and we love it.

To what extent is that -- has it been -- what do you get out of owning it? Is it just strictly a strategic investment?

Or it's never really been integrated into your platform? I mean, is it's just be just listened to secrets as a result of being on the board?

And what is -- where does this position -- where does well simple fit, long-term in them? Is it just nothing more than a strategic investment?

Will it ever be integrated any -- to any extent?

Yes it’s a good question, I'll tell you how I think of it Tom. I think about solving for the problem of incumbency, I think about our management team and being very, very busy day-in and day-out focused on the business at hand.

What Wealthsimple has done, what Portage has done, what our FinTech relationships generally have done is really helped our management team, not just focus on the business at hand, but focus further out to horizon number one, focus further out still to horizon number two, it gives some relationships in the FinTech community, it gives some dialogue in the FinTech community, is created very real partnership opportunities with some of these investi companies. And as I said, the problem of incumbency is a very real one.

And that is why do large older companies not see what's coming at them. And the best way, I think, to solve for incumbency is to make sure that you have something like what we have, which keeps our management team very much kind of current and very much on their front feet, as they look at how the industry is going to evolve.

So that kind of solving for the problem of incumbency is one of the things I like most about it. But there's also a lot of business done.

I mean, we are a major investment investor in conquest financial planning and we're rapidly rolling that out across the IG Wealth. We've had numerous conversations with [indiscernible] Barry has done a significant amount of business with -- in the past with Wealthsimple, and I'll let him speak to that in a moment.

But it is -- I really view this exposure to FinTech as really important in just making sure that IGM is on its front feet and competitive. Barry, do you want some thoughts?

If I could, James, thanks. Just to amplify your first point.

And I'll speak on the financial side. Second, on the first point, you're right, I think we've always viewed Wealthsimple also is attracting investors into the wealth ecosystem earlier.

I mean, you've seen 100s of 1000s of new clients of Wealthsimple come into the arguably the wealth ecosystem of Canada much earlier than they would or coming in at all, because you wouldn't see the millennials and click those in their 20s to come in and start to see. It's wonderful that they are starting to see every month and then that's we don't know the journey they take at some point they might need advisor once they hit a certain point in their career a certain point in life.

So we think that that's always advantage. On the asset management side, as James pointed out we -- , Mackenzie as we've got our ETF very proud of ETF franchises.

It's hitting 10 billion probably next week. So it was growing very, very fast.

And so we've been increasingly working with -- well simple with [indiscernible]. To design ETFs that they need, that we've manufactured for them.

So it's really growing synergy, even within IGM between Wealthsimple and Mackenzie, they were quite excited about actually, because as you know, they – their lot of their new businesses within Wealthsimple are growing very fast. But that core financial part of the technology platform is also growing 15% plus a year.

And so that's another connection point Tom between IGM and within Wealthsimiple and Mackenzie that you should see some future growth going forward.

Thanks for the color.

Hi, good morning. My first question was maybe just taking on some of these questions around the FinTech investments and just was curious, I know that you mentioned stuff like [indiscernible] and conquest.

But within the Portag3, private equity fund, are there other investments that you find really interesting whether or not it's been a potentially very significant financial return type opportunity or also just ones that may eventually become an attractive entity that you would partner with and incorporate into somewhere within the IGM business?

Yes, I see that there's a variety. And I think most of them right now are playing on James the theme of incumbency.

It's those places where you've got a management team who's energized and focused on a space that's really as synergistic to the rest of what happens in IGM. So there's a few of those on the mortgage side of our business and elsewhere that we find very exciting.

There's nothing that's at the level of Wealthsimple right now, where this is a true success. And something that's just got this clear, clear momentum.

But I think, broadly, we're quite excited about the Portage ecosystem, we've just been a lead investor in the Infant 3. And as James said, that ecosystem opens a lot of doors for us to sit at tables we wouldn't otherwise be at, and to leverage management teams that are top of their game, and really bring capability to IGM that we wouldn't otherwise have.

Okay, thanks. And just the other question I had was a bit more just bigger picture was with respect to advisors in Canada and kind of the approach to managing client money, is there anything that you would say has kind of changed in the past decade or two with respect to the types of investment product mix they're choosing for their clients?

Has things like having two major market downturns and I guess the little over a decade, whether or not it's the regulatory changes that we've seen, kind of getting rolled out over the past decade, has that changed how they manage money and the implications for what that means for IG Wealth and Mackenzie?

[indiscernible] but I would say that on a whole advisors and how they view, portfolio construction has changed, simply because the amount of risks that you need to assume now to achieve the same type of return has as tripled over the last 20 25 years. And it's forced advisors to really look at really their strategic asset allocation first and making sure that they have the right setup, they have the right asset classes involved in their portfolio construction, and then that they have done it at the right percentage is based off of what the client wants to achieve.

So from a from an IG perspective, that's forced to us rightfully so and I mentioned iProfile during the presentation. So to really look and make sure that strategically we have an asset allocation that makes sense.

And that we do look at all the opportunities out there, there are far more tools available to us than there were 10 20 years ago, and it's incumbent on us looking at public, private, cap bias, you talk about value growth, you can go on and on and on about the opportunities out there. So that's why, we really employ a model solution or a managed solution type of approach at IG.

We take that off the hands of our advisors, because that's something that we are good at. And that we allow them to really focus on the relationship and making sure that not only are they offering the best risk adjusted returns for their clients, but they have enough time to really focus on the aspects of financial planning and investments are only one of the six aspects of financial planning.

If I could add -- Damon spot on Geoff, going forward, the advisors to Damon's point, there are more and more tools in the toolkit that they can now access and they have to access and it’s points to this whole democratisation of these types of investment strategies that were solely the domain of the sophisticated institutional investors now that are now coming to the advisor and investors which is really exciting, but actually necessary to because again with low interest rate environment going forward perhaps more muted equity, public equity returns going forward. You need more in the toolkit to put in that portfolio to get the risk adjusted returns they need.

And as Damon said me you see liquid also now in Canada approved three years ago. Now the private also coming like us versus with our OEMs, [rappers] with Northleaf.

James mentioned China, China, the equity and fixed income markets weren't really accessible by Canadian investors even a couple years ago now they are we ourselves Mackenzie as we already file are launching Chinese fixed income mutual fund in June and July to compliment our fast growing equity Chinese equity mutual fund. So it's really take a look at your traditional equity portfolio and extend it into areas such as China and or privates extend your fixed income into again other types of EMD and Chinese fixed income and private credit now extend, James point reflation or inflationary not that we're going to time that but put some building blocks in there, like infrastructure and rates and gold and precious metals that are natural inflation hedges.

It's a real rethinking of the portfolio construction that we're fortunate enough to help Damon IG Mackenzie to do some of that for them. And that IG, iProfile is just an institutional quality product.

That's forward looking as to what advisors need going forward. And that's exactly what we're seeing more and more with Mackenzie in our discussions with advisors.

Thank you.

Thanks.

Hi, good morning. I just wanted to touch on the operating leverage this quarter and the lack thereof, just nice lift in revenue quarter-over-quarter, but essentially the expense growth fully offset?

Should we be not interpreting this quarter is sort of indicative of the operating leverage within IGM and this is big picture was there's some seasonality at play this quarter?

I'll take that one. So we knew there was being a tremendous operating leverage the best comparison is to Q1 of last year earnings were up 26% that consolidated.

And at the component level, they're very strong as well. I would highlight that there is seasonality and significant seasonality in our business and in our expenses in particular, because it's PCs, and we've got to amplify promotional and processing expenses every year Q1.

So when you compare them to Q4 is not going to be appropriate in the first quarter because that seasonality and we knew there's being so much operating leverage. And that's what's led to Mackenzie's earnings being up by over 40% from last year when you exclude the acquisitions, as well as strong growth at IG.

And that's what you should expect from the businesses going forward. There's a lot of fixed costs, we've given guidance for the full year.

And yes, up year-over-year, there's going to be tons of operating leverage going forward. And yes, Q1 is an odd one, not only because of ample of expenses, but because we have fewer days in the quarter.

And so I talked about the peculiarity between asset based comp which is one quarter have an annualized rate relative to our revenues that are 93 60 bps on an annualized rate. So there's two seasonal headwinds.

But yes, we're so proud of the operating leverage put on and we're so excited about the future.

Okay, understood. Jumping to Northleaf, the contribution from Northleaf was lighter than expected from my perspective, just is this quarter indicative of what we should expect from that asset?

Or was there something sort of weighing on -- I think it was just under a million….

You're on a really good point. So it's, it's Luke, again, the earnings were a bit late for Northleaf on two fronts.

One, the commitments the new business being put on is very strong, you saw the refer to the $1.5 billion in commitments in the quarter, that's $1.5 billion on a basis $15 billion on AUM so you can think of that as 10% growth in their business in the quarter alone. The way they earn their money, though, is most of it generates management fees when the money is invested.

And right now, at this time, they've been slower at putting the money to work than expected, given the market that we're in, and were some of the valuations are at so that that didn't create a lag in revenue that will be put on as the commitments get put to work. And there was also a -- an accounting trough of about a $1 million that hampered and that was just, again a true-up in the results.

So we're sticking consistent with our guidance for the full year of $10 million from Northleaf and I suggest given the growth you're putting on, this is going to be a very high growth business for us going forward.

Okay, that's helpful. And the $1.5 billion raise was IGM part of that commitment at all, or was this all third-party AUM?

It was substantially third-parties, and you can think of that at $1.5 billion being about a $1 billion private equity, none of which would have come from IGM and $250 million to each of infrastructure and private credit. And so we've made active commitments at IG and Mackenzie, but that's just starting and will come on over time.

Okay, understood. And then, just my last question, a bit of a follow on that you talked about Wealthsimple and there's some I guess Mackenzie ETFs within that distribution channel, is there anything you can quantify there like how material is well simple as a distribution channel for Mackenzie ETFs?

Hi, its Barry again. The -- so what we --what -- our partnership between Mackenzie and Wealthsimple is actually has helped us has -- in the past has helped them to build Wealthsimple branded ETFs.

And so there are two ESG ETFs Wealthsimple branded, have been very, very successful in that channel, given you can imagine what the demographics being mostly millennial, so I believe that's at least over $0.5 billion, if not more between those two ETFs that more $600 million or $700 million. And then they're launching a [indiscernible] compliant ETF Wealthsimple that we manufacture for them.

So the discussions are going on with them to combination -- principally it's been early days us helping them manufacture Wealthsimple and ETF, which essentially ups as the manager the back office, they're really Mackenzie, but we brand them well simple for them. But also ongoing discussions with them also with some of our new ETF launches at Mackenzie ETFs in their portfolio.

So it's a combination of both and we're actually quite excited by that distribution channel with Wealthsimple between the -- for the Mackenzie ETF. Thank you.

That’s it from me. Thank you.

Good morning. Maybe sticking on that ESG or stainable theme?

On the retail side, we've obviously seen robust growth and into the quarter into Q1. Barry is there an opportunity to expand that theme and into institutional channel but I know obviously that's been very hot as well as my understanding Greenchip to our I guess Mackenzie has institutional assets within that sustainability funds?

Great question. Absolutely.

As you know, the interests and the application of ESG actually began in the institutional marketplace. And now it's coming very strongly to the retail marketplace hearing in Canada as well as in the United States as we anticipated, and it's coming very, very strongly.

I'd like to speak to that in a moment. On the institutional side, though, yes.

So we've been, Greenchip, we on-boarded and there safely at home and Mackenzie boutique and we've been actively now bringing them through our institutional sales opportunities in Canada, the U.S., in Europe and in actually in China surprisingly, where ESG has really taking off. And we have a strong interest in all those regions for Greenchip’s environmental equity global environmental equity product and strategy.

And you'll probably hear from us shortly in terms of some of the early successes. But we've been very, very pleased.

That's a real huge door opener when you go to these institutional consultants and directly to these large pension plans or so wealth funds to say we have a world class environmental equity 14-year history, a successful history in terms of performance. And so that's been building very nicely.

And that's why I was mentioning the institutional wins are lumpy, they may come in. If you're all recall, last April in 2020, when retail was a little lumpy in Canada, we brought in over $2.5 billion on-boarded institutional wins since then, has been a little slow, but that pipelines back up again, and the two leaders for us the pipeline are Greenchips environmental equity product, as well as actually our emerging market product, core team, which has outperformed the index the last year over 1,000 basis points.

So where we lean in where we need to, and there's been really strong interest there. And I – if I -- now that you've asked, what's sustainability, this is really a game changer for the industry in Canada, another game changer.

There is remarkable interest in sustainability, as we know, capital redeployed in this area tens of trillions of dollars are coming decades. And so we've got the -- we launched the Greenchip balanced, we launched a stable bond fund, we have that was the first balance environmental theme.

And as I mentioned in my comments, we hired one of the pioneers of ESG [indiscernible] investing in Canada, Andrew Simpson, and you'll see his team and products being launched over the next couple of quarters. So collectively, we're working real hard in that area.

It's important to us as a business is important for the climate in the world that we get this right. And so we were really embracing this hard.

And get in front of that, as I think we did a couple years ago for the advisors. I want to continue to be in front of them.

Thank you.

Thanks. And maybe just on GLC, that recently close?

Is there any notable updates with that transaction since you closed it?

Great question. So the early days, but really -- getting to be really excited and pleased.

So first of all super team, teams that we brought in, in terms of adding to our investment talent across a lot of boutiques, and then as I mentioned, standing up a separate large separate clean equity boutique that has institutional quality of that early days, we're having good discussions of key and institutional investors with that boutique. And then of course, probably the other two principal advantages of that of the GLC Asset Management acquisition a was the fact that we Mackenzie in our are gainfully working closer with [indiscernible] wealth business in Canada, which is growing very nicely that we can again look for ways that we can grow that with new ideas and products.

That's so those that is early days going very well through the dialogue and the planning. And then the group retirement marketplace, which is a growing marketplace in Canada, as we know.

And we Mackenzie had de-minimis exposure there prior to GLC, and now, I would say that the reception has been very positive. Institutional consultants are the intermediaries for a lot of those clients.

But they've been fine with the transaction and a little bit of a wait and see for a couple of quarters. But that's gone very well.

And we probably should be proactive in that channel over the coming quarters. Once everything has been settled down in terms of the changes to the organization that the investment [indiscernible] saw and now they're fine with that.

So all green lights right now for us to get going with two new channels. And again, very happy with the teams coming in.

And the new investment professionals. They're just a terrific team and they fit very nicely culturally into Mackenzie.

Right. Thank you very much.

You're welcome.

Yes, thanks and good morning. My question is on the high net worth segment and in mass affluent segment and the discourse around the iProfile managed solutions.

Looks like really solid performance there is there anything you can tell us about the growth in iProfile solutions product. What's the uptake from high net worth and mass affluent clients in terms of the gross sales that you are generating?

And what are you expecting this product going forward?

Yes, so the growth rate statement, by the way, the growth of the iProfile product has been substantial over the last three or four years, our approach at IG is to really embrace well constructed managed solution. So we have over 80% of our flows are directed there.

we foresee that continuing and for the mass affluent high net worth segment iProfile which is really a makeup of three different types of solutions. There's the iProfile pools, there's the iProfile portfolios, and then there's a new discretionary iProfile models.

So the most money is in the pools, well over $20 billion the portfolio started last year and we just – we are approaching $2 billion in those. And then that discretionary model portfolios, as I said, just started.

So we expect that to continue to grow. We fully have made sure that we've designed these things to be very receptive to those types of markets that we want to make sure that we grow our percentages.

Great. And is it new clients coming to the IG platform that are driving that growth?

Or is it existing clients shifting some of their money from other funds for the iProfile?

It's actually both. So we've done a great job of working with our existing clients and making sure that they're aware of the benefits of leveraging the iProfile.

And we -- it's one of the reasons why we've got -- we're very excited about our increasing share of wallet with our existing clients. But it's also been a huge driver of our ability to bring a new client to the organization.

So we'll share our wallet, new client acquisition has been key for us, and they will continue to be key for us going forward. And then it's helped us bring new advisors, advisors that are experienced in the industry that want to focus on financial planning, and want to rely on well constructed data solutions to join our firm as well.

Okay, that's great. Shifting to the comments around China and the attractiveness there and recycling some of the capital from Wealthsimple is the view right now that the most attractive option is the one you have with China AMC or is there other opportunities in China that could -- we could see that capital get recycled and deployed into?

Yes, I would appreciate the question. But I would say we have not landed on what the optimal deployment of this dry powder is.

I mean, China AMC as I said as an asset we very much like and would be open minded to owning more of. But I think as I said earlier, I think as the world reflates and confidence in boardrooms bills and builds, we're going to see a very active M&A environment generally, and I expect a lot of wealth platforms and asset management platforms to potentially become available.

So we are very open minded as to how this capital will get deployed.

Okay, great. And then last one is just maybe more of the macro view.

Industry as a whole is obviously doing very well from a net flow perspective. And [indiscernible] some underlying macro concepts that are helping to drive that, but what are your overall views on the sustainability of this record industry net flows at least over the near-term?

It's very great question. So certainly, we're seeing record flows in the industry.

And that's a good thing, obviously, for all of us specifically IGM, as we gain market share. It is -- we think this can go on for a little while now.

I mean, this can't go on forever as trees can't grow the sky as they say. But if you see the your point, the macro forces, first off interest rates.

All the Central Banks are signaling, particularly in Canada, United States and Europe and elsewhere, interest rates will be low first of all for quite a while, at least for a couple of years. And in the Central Banks, as we know are really focused on that economic recovery and jobs and employment probably more so than ever have and so they're going to be a little more accommodative or patient rather to raising rates until we see those signals come back.

And even to James point, it’s even reflation, as you know, the Central Banks have changed their posture on inflation not so much a target, but also more of an average. And so as if inflation does kick up transitory wise above those targets, they'll again be patient with it, because just ensure that economic recovery is there and the jobs are there.

So interest rates remaining low. The equity markets, of course, been bolstered by macro forces with fiscal stimulus, but also, obviously, as a broader way of companies that are thriving in this environment, some industries are still not and as unfortunate and as some folks are so disadvantaged with this and COVID environment but increasing amount of companies are thriving.

And so the corporate earnings, as you probably seen coming in are strong. And there's no reason why you've seen some of the large financial institutions in Canada, United States point to the fact that might go on for a few years going forward.

So when you have that environment, plus, obviously, the average citizen being a little more careful with their spending, and therefore that money going into savings. That is a farer environment for wealth and asset management industries.

And so we were not going to put up a point of prediction as to when that might subside. But it's not a one quarter phenomenon.

This could go on for quite some time. So we're here very focused all of us just to take advantage of it, gain market share in a growing market.

That's a nice combination. But first and foremost, obviously just focus on providing great advice and great returns for our clients.

But great question. Don't have a crystal ball, but it's certainly a robust environment now for the industry.

Thank you very much.

Yes, thank you everyone for joining the call today. We certainly appreciate the broad set of engaging questions.

And with that, hope you all have a good weekend and we'll end the call. Thank you.