North American Dividend Mandate

ScotiaMcLeod Investment Portfolios Update

July 12, 2017

Trade rationale: summary of recent activity that has taken place within the mandate.

Removed TJX Companies Inc.: We believe yesterday’s Amazon Prime Wardrobe announcement will be highly disruptive across the apparel retail industry. Amazon Wardrobe is a program available to Amazon’s estimated 80 million US Amazon Prime members that allows delivery of 3-15 apparel items without payment. Customers can effectively try on these items in the comfort of their own home and pay for only what they keep.

As a result we have decided to exit our position in TJX. Although we believe that TJX’s off-price business model is defensive enough to survive in an Amazon world, we worry that Prime Wardrobe will impact its customer traffic over time leading to an eventual de-rating in its stock valuation.

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