Since June 2024, the Bank of Canada has cut rates eight times (totaling 250 bps), bringing the policy rate to 2.50%. We believe one more cut is possible over the next six months amid slowing GDP growth, elevated trade tensions, and high unemployment. While delinquencies remain a concern, easing monetary policy should help mitigate risks. We find high-yielding funds, like AWM, increasingly attractive in the current declining rate environment. This is because MIC lending rates are less elastic, meaning their yields tend to decline less in a falling rate environment, and rise more slowly in a rising rate environment. At the end of FY2025, the MIC had $33M (15% of the portfolio vs the sector average of 6%) in impaired mortgages, up from $20M (8% of the portfolio) at the end of FY2024. While sector impairments also increased YoY, the rise was more moderate at 25%, versus the MIC’s 65% increase. While impaired mortgages increased, we believe the fund remains well-positioned with a conservative LTV of 67%. Supporting this view, AWM raised loan loss provisions by just 12 bps to 0.81% in FY2025, in line with peers, reflecting management’s confidence in limited future losses. Outlook: We project a yield of 8.36% in FY2026 vs. 9.34% in FY2025. * AWM Diversified MIC has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions. AWM’s yield is in line with the sector average Smaller average loan sizes, and higher LTVs Higher proportion of impaired mortgages, though loan loss allowances remain in line with the sector average, reflecting management’s confidence in only limited incremental losses The table below compares AWM’s portfolio with other MICs (AUM $100M+) focused on already-built single-family residential units. Source: FRC / Various Portfolio Details (YE – March 31st) Mortgage receivables fell 12% YoY to $213M in FY2025 on softer originations, but rose