[This video uses animation to illustrate spoken content. Three simple stick figures appear on-screen, each with
an investment portfolio over their head and an arrow pointing upwards. The arrows fly up and transform into
three circles.]
Many Canadians look to earn higher returns from their portfolios by investing in securities like mutual funds,
ETFs and stocks.
[The circles combine to form a data point at the left end of a line graph as three other lines grow out of the dot
to represent market changes.]
However, many of these investors feel like they’re at the mercy of the market’s highs and lows while attempting
to reach their goals.
[A box with the text “Principal at Risk Notes” appears.]
These investors are unaware that there are investment solutions like CIBC Principal at Risk Notes that start
with their goals in mind.
[Arrows fly upwards and behind an encircled calendar. Encircled money appears to the left of the calendar, and
an encircled speedometer labelled “risk” appears to the right. All three circles combine to form a target marker
with a checkmark at the centre. A house, graduation cap, and plane appear around the target marker.]
CIBC Principal at Risk Notes can be tailored to an investor’s specific time horizon, cash flow needs and risk
tolerance, with the sole aim of increasing the probability of meeting their unique goals.
[A contact card for the case study candidate “Eddie” appears. The following information appears on screen in
bullet points.]
Let’s take a look at Eddie. He’s 66, recently retired, and needs approximately 7% per annum in cash-flow to
fund his lifestyle.
[A line graph appears and shows a plotted line steadily moving upwards. A more sporadic line with varying
highs and lows replaces the steady line and finishes lower with green checkmarks or red ‘X’ icons marking the
annual points this line over- or under-performed.]
With a traditional investment approach, Eddie would need the market to generate approximately 7% per year in
cash flow without declining in value, or would need to buy a high risk bond to maintain his lifestyle.
[The sporadic line disappears and the steady line returns showing consistent growth with a green check at
each annual point. A slightly sporadic line appears underneath the steady line, representing a flat and negative
market.]
But by using CIBC Principal at Risk Notes, Eddie can customize his investments with the potential to generate
7% in cash flow per year – even if the market is flat or slightly negative.
[The following information appears on screen in bullet points.]
CIBC Principal at Risk Notes may be suitable for investors like Eddie, who:
● are already investing in mutual funds, ETFs and stocks and are comfortable with some downside risk and
● are looking to maximize the probability of achieving their specific target return
[The CIBC logo appears.]
CIBC Principal at Risk Notes. Where your financial goals are the benchmark.
The Balanced Asset 10 Index™ overview video I 2

[This video uses animation to illustrate spoken content. Three simple stick figures enclosed in a circle appear
with an arrow pointing to money enclosed in a circle. The money is replaced by a shielded dollar sign which
then points to a lock over the letters GIC in a struck-through circle. The struck-through circle flips around to an
image of money in a jar enclosed in a circle.]
Canadian investors who need capital protection but are not willing to lock-up their hard-earned money in a
GIC, often accept a reduced rate of return from a savings account.
[A box with the text “Principal Protected Notes” appears. A shielded dollar sign and upward arrows appear next
to the box.]
These investors are unaware that there are other investment solutions like CIBC Principal Protected Notes that
provide the same capital protection of traditional GICs but with increased return potential.
[A contact card for the case study candidate “Priya” appears. The following information appears on screen in
bullet points.]
Meet Priya. Priya is in her mid-40’s and has been investing for years in order to purchase a house in the near
future.
[A bar graph appears. The bars change in height, representing high-risk investment. The bar graph is then
replaced by three combination locks.]
Although Priya is unhappy with the fixed rates being offered on traditional GICs, she’s not willing to risk what
she’s already earned for her down payment, or lock-up her money for several years.
[A singular bar appears, with a security lock within it. The rectangle then gets taller.]
By investing in a CIBC Principal Protected Note, Priya benefits from 100% principal protection at maturity with
the higher return potential of the stock market.
[The bar transforms into a box labelled “sold” with a house appearing above it.]
Now Priya may reach her goals sooner, with peace of mind along the way.
[The following text appears in bullet points.]
Principal Protected Notes may be suitable for investors like Priya who:
● value 100% principal protection at maturity and
● are looking to potentially earn above market returns relative to fixed-rate GICs and savings accounts
[The CIBC logo appears.]
CIBC Principal Protected Notes.
Increase your return potential, not your risk.

Generative artificial intelligence – What investors need to know 

 

[Energetic music] 

 

[CIBC logo] 

 

[Generative artificial intelligence – What investors need to know] 

 

[Robertson Velez  

Portfolio Manager, Global Equities 

CIBC Asset Management] 

 

What's unique about my background is that I come from two worlds. After graduating from university with my computer engineering degree, I spent the first 12 years of my professional career as an engineer where I designed semiconductor chips in the computer graphics industry. 

 

I later graduated from an MBA program and I switched to finance, where I have spent the last 15 years on the “buy” side covering technology stocks as an analyst and then as a portfolio manager. 

 

[What is generative AI?] 

 

Artificial intelligence is not a new field.  

 

[An older-looking computer display screen with a headline of text reading “Welcome to Eliza}”, and underneath a text conversation between two characters (“You”, and “Eliza”,) in which they discuss “You’s” problems with men. A small, two-wheeled robot slowly maneuvering through a hallway (Auat Cheein F, Lopez N, Soria C, di Sciascio F, Lobo Pereira F, Carelli R, CC BY 2.0, via Wikimedia Commons). An empty self-driving car driving on the street.) 

 

We’ve actually been doing it for many decades. What has changed is that with the most recent iteration, which is generative AI, we're able to do a lot more. Write essays, write code, create videos, create graphics.  

 

[A computer application interface. Topmost line of text reads “Write an essay about the history of finance”. In a box below, an essay with the title “Title: The Evolution of Finance: A Journey Through History” appears, and an essay begins self-generating.] 

 

And this has the potential to allow us to interact with machines in a whole new way. 

 

[How will AI use evolve?] 

 

We have seen AI used in voice recognition, image recognition, chatbots and recommendation systems.  

 

[A woman carrying her newborn baby boy asks a question to a smart speaker. A brain scan image showing four different angles of a brain. A ‘chat’ app interface showing a text conversation between a woman and a chatbot, with the woman booking a reservation at a restaurant.]  

 

Going forward, looking at generative AI, I see three areas where we would see potential new use cases. 

 

[Potential use cases for generative AI: 

 

1. Content creation and productivity 

2. Search queries 

3. Data analytics and customer interaction] 

 

One is in productivity. Word processors, spreadsheets. 

 

[Changing data on spreadsheet. Young professional woman sitting at an office desk using a desktop computer showing charts and graphs. A woman looking at data on screen; the data is reflected in her glasses.] 

 

They would incorporate generative AI to help create content. And this can be applied to graphics creation as well as coding. 

 

Secondly, I see potential in revolutionizing search where users can put in more complicated queries and get better, more structured answers to those queries. And that would revolutionize the way that we interact with businesses online. 

 

And third, there's also the potential for all these businesses to make use of its troves of data that it's collected about its customers and use that data, and generative AI to be able to serve those customers and interact with them in a much more comprehensive way. 

 

[A drone POV of a busy urban pedestrian crossing, with minimalist graphics overlaid onto the people walking around. A busy shopping mall with graphics of moving numbers overlaid on top.]  

 

[Lessons from previous tech innovations] 

 

So in previous technology revolutions, investors often fall into the trap of overestimating the short term and underestimating the long term. So in the case of the internet for example, we did see a sharp correction in 2000 because investors were overly exuberant about the short-term promise of the internet. 

 

[MSCI World Information Technology vs. MSCI World 

(Data Source: †Morningstar Direct June 19, 2023) 

 

A chart with two line graphs: one plotting “MSCI World/Information Tech GR USD” and one plotting “MSCI World GR USD”. Date range on the x-axis is 1995 to 2004. Y-axis shows values for “Growth of $10,000”, with values ranging from $0 to $90,000. The line graph for “MSCI World/Information Tech GR USD” animates to show a sharp rise then drop from about 1998 to 2002, with the value beginning at about $20,000, rising to a high of about $80,000, then dropping back down to about $20,000.] 

 

But you look out the next two decades, the potential of the internet has been realized by more than the expectations in the initial hype.  

 

[The previous chart now zooms out to show a date range from 1995 to past 2020, and values from $0 to over $250,000. Starting in the mid 2010’s, the value of “MSCI World/Information Tech GR USD” begins spiking upwards to a high of nearly $250,000 at the current date.] 

 

So it's important for long-term investors to have a clear view of the potential of new technologies both in the short term and the long term. 

 

[Threats of AI?] 

 

I think every new technology is always greeted by some trepidation about the potential risks.  

 

[An old black and white photo of a radio tower. An old black and white photo of a nuclear plant. Old black and white footage of fashionable women arriving at a location in a car. A space shuttle launch. A satellite orbiting the earth. Robotics engineers watch and discuss a robot arm in motion.] 

 

But generally speaking, revolutionary technologies have provided more benefits than harm to society, and we've always successfully navigated the risks. I think the same applies to AI. There are clear risks in letting machines take over human functions. But what is important to remember is that AI is meant to replace human prediction, not human judgment. So as such, I think that some type of regulatory framework makes sense. But it is a fine line and a fine balance between protecting society against possible AI threats and inhibiting new technologies before the potential is realized. 

 

[Investor’s perspective] 

 

I think we're still at early stages of development for generative AI, and there is a lot of noise in the near term. Practically every company claims to be incorporating generative AI into their products and services. So it's important to understand the value chain to determine which companies really benefit from generative AI and why. It's also important to be very selective in that process as performance is determined as much by what we don't own as what we do own. 

 

So in the global technology funds, this is what we do.  

 

[A screenshot of the webpage for the CIBC Global Technology Fund. A screenshot of the webpage for the Renaissance Global Science & Technology Fund.] 

 

We follow a disciplined process to find these opportunities in a concentrated portfolio of stocks to generate alpha over the long term, while managing the risks in the near term. 

 

[Talk with your advisor to learn more about 

the CIBC Global Technology Fund 

and the Renaissance Global Science & Technology Fund] 

 

[The views expressed in this video are the views of CIBC Asset Management Inc. and are subject to change at any time. CIBC Asset Management Inc. does not undertake any obligation or responsibility to update such opinions. This video is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice, it should not be relied upon in that regard or be considered predictive of any future market performance, nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this video should consult with their advisor. All opinions and estimates expressed in this video are as of the date of publication unless otherwise indicated, and are subject to change. Any information or discussion about the current characteristics of this fund or how the portfolio manager is managing the fund that is supplementary to information in the prospectus is not a discussion about material investment objectives or strategies, but solely a discussion of the current characteristics or manner of fulfilling the investment objectives and strategies, and is subject to change without notice. You should not act or rely on the information without seeking the advice of a professional. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the simplified prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.  

  

CIBC Asset Management and the CIBC logo are trademarks of Canadian Imperial Bank of Commerce (CIBC), used under license. 

  

The material and/or its contents may not be reproduced without the express written consent of CIBC Asset Management Inc. 

  

†©2023 Morningstar Research Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. 

 

[CIBC logo] 

 

[The CIBC logo is a trademark of CIBC, used under license.] 

So I think it's important to emphasize that the banking system broadly is very robust, strong deposit base, strong regulatory
framework, a strong business models. That's particularly the case in Canada where the problems have arisen have been in
idiosyncratic pockets of the banking system. Regional banks in the US, for instance, where there have been a confluence of some mismanagement, a more volatile deposit base and also some shortcomings on regulation, but of course have led to capital flight or deposit flight out of several institutions which have led to a number of policy initiatives by central banks, the federal government in the US and then in Europe, in Switzerland, the arranged takeover of Credit Suisse by UBS Bank. Market expectations around central bank policy outlook have swung wildly over the past two weeks ahead of the financial volatility. Markets had been conditioned by the Federal Reserve to expect more interest rate increases with the onset of the volatility. Those expectations shifted to expect no more rate increases and actually a quick pivot to rate cuts. We think the truth lies somewhere in the middle. Markets have been too aggressive in pricing a pivot towards rate cuts. At the same time, we do expect growth to slow. We are looking for a mild recession to occur in the US, in Canada, in Europe over the next 12 months and that will slow inflation.

 

The inflation rate in the US and other economies will moderate over time. The question is how quickly. That suggests to us that central banks continue to focus on the importance of cooling inflation, reducing inflation back towards their target, but also being very cognizant that their words have great import for confidence in the financial system. In terms of specific opportunities, One that is particularly attractive right now is fixed income. Fixed income has had a difficult couple of years. When interest rates rise, bond prices fall. So that has been quite painful for investors in bonds. That situation has changed significantly with interest rates and bond yields much more attractive levels. This means that bonds can get back to playing their traditional role within a balanced portfolio as a counterweight to equities during periods of market volatility, but also as a standalone attractive source of return. So what does this mean for investor portfolios in normal market conditions? Trying to time market participation is difficult during periods of high volatility.

 

Timing markets is almost impossible. We think it really important to focus on long term fundamentals. Which asset classes have the most attractive of long term expected returns. So again, a focus on long term investment goals and objectives is particularly important during periods of volatility such as we're experiencing right now.