Agenda 2 Presentation Question and Answer Intermission Feedback Session Keynote: Margaret Franklin Wine and Cheese

2

Agenda

Presentation

Question and Answer

Intermission

Feedback Session

Keynote: Margaret Franklin

Wine and Cheese

3

Fixed Income

Canadian Equity

Global Equity

US Equity

Economics and

Strategy

Our SIAS Fund“Student Managers, Professional Management”

Economics develops the market intelligenceStrategy determines asset allocation

Canadian Equity is bottom-upUS Equity is top-downGlobal Equity is top-downFixed Income is top-down

Attribution for the portfolio as a whole and each asset class against benchmark

Canadian Equity is S&P/TSX Fixed Income is DEX Global Equity (including US) is MSCI All-World Index excluding Canada

Compliance ensures IPS conditions are met with compliance checks done dailyMonthly reports are sent to the client

Portfolio Risk is evaluated for each asset classSecurity Risk is determined for each trade

Economics & Future StrategyOverview Composition & Performance Attribution & Risk Events

4

Portfolio OverviewFund Size: CN$ 10.8 million | Inception Date: December 2003 | 2011 First Quarter Alpha: 0.42% | As of March 31, 2011

0.0

10,500,000.0

0.0

10,800,000.0

0.00%

2.66%

Benc

hmar

k Ret

urn

0.00%

3.08%

Portf

olio R

etur

n

Sara Moghaddamjoo

Meadow Wu

Fiona Wang

Xingxing Zhang

Derek Wong

Alex Conconi

Amir Khakban

Overview Portfolio Macro Events Canadian Equity Global Equity US Equity ConclusionFixed Income

5

2006

2007

2008

2009

2010

2011

70

80

90

100

110

120

130

IPS Guidelines and Constraints In Compliance

General Asset Mix within IPS Range Yes

EquityEach holding < 10% of equity portfolio Yes

Micro Cap, prohibited Yes

Fixed IncomeCredit rating: < 10% BBB, and 0% below BBB Yes

Duration within ± 1 year of the DEX Yes

Notes No out of Compliance Record Yes

8.8m

10.3m 10.7m

7.4m

5-Year Portfolio Cumulative Return: 20.1%Change in Management


6

0.00%

2.66%

Benc

hmar

k Ret

urn

0.00%

3.08%

Portf

olio R

etur

n

SIAS Portfolio Excess Return: 42 bps

Canadian Equity39 bps

Global Equity(14) bps

Fixed Income18 bps

Portfolio Return3.08%

Excess Return42 bps

[28 bps]


7

37%

36%

26%

1%

Portfolio Composition

Top 3 Performers Return Q1 2011 Weight

Canadian Oil Sands LTD 22.96% 1.75%

Encana Corporation 16.57% 1.08%

Toronto-Dominion Bank 16.51% 2.51%

Fund Size: CN$ 10.8 million | Inception Date: December 2003 | Number of Holdings: 92 | As of March 31, 2011

Asset Class SIAS Weight IPS Weight Active Weight

Canadian Equity 37.17% 35% 2.17%

Global Equity 36.17% 35% 1.17%

Fixed Income 25.71% 28% (2.29%)

Cash 0.95% 2% (1.05%)

Fixed Income

Canadian Equity

Global Equity

Cash


8

28%

3%

5%4%

26%

3%

26%

5%

Canadian Portfolio Composition

Top 3 Holdings Return Q1 2011 Weight

Royal Bank of Canada 15.73% 7.37%

Suncor Energy , Inc 13.83% 6.00%

Toronto-Dominion Bank 16.51% 5.96%


Asset Class SIAS Weight IPS Weight Active Weight

Financials 28.49% 28.36% 0.13%

Energy 26.15% 27.10% (0.95%)

Materials 25.63% 22.91% 2.72%

Others 19.73% 21.63% (1.9%)

Financials

Utilities

Consumer Discretionary

Consumer Staples

Energy

Information Technology

Materials

Telecommunications


9

Global (Ex-US) Portfolio Composition


ISHARES S&P EUROPE 350 INDEX FUND 5.60% 38.35%

ISHARES MSCI BRIC INDEX FUND 0.79% 14.70%

ISHARES MSCI EMERGING MKTS 1.19% 11.98%


43%

27%

24%

7% Regions Benchmark (MXE2) Weight SIAS Weight Differences

Europe 48.03% 42.55% (5.48%)

Emerging Market 13.32% 26.68% 13.35%

Asia-Pacific Ex Japan 24.30% 23.89% (0.41%)

Japan 14.35% 6.88% (7.47%)

Asia-Pacific Ex Japan

Emerging Markets

Japan

Europe


10

29%

16%

16%

4%

12%

12%

11%

US Portfolio Composition


Technology Select ETF 1.26% 9.56%

Health Care Select ETF 3.04% 8.55%

Corning Inc. 3.93% 7.12%


Sector MSCI USA Weight SIAS Weight Differences

Technology 17.17% 28.61% 11.44%

Consumer Staples 8.64% 16.34% 7.70%

Health Care 10.77% 15.62% 4.85%

Industrials 11.30% 12.24% 0.94%

Consumer Discretionary 12.35% 12.19% (0.16%)

Other 39.77% 15.01% (24.76%)

Other

Technology

Consumer Staples

Health Care

Materials

Industrials

Consumer Discretionary


11

Federal

Provincial

Municipal

Corporate

19%

45%11%

24%

Fixed Income Portfolio Composition

Top 3 Holdings Coupon Expiration Date Weight

OMERS Realty CTT Holdings Inc. 4.75% May 5, 2016 12.62%

Province Of Ontario 5.85% March 8, 2033 8.79%

York Region District School Board 5.30% June 3, 2025 8.20%


Sector SIAS Weight DEX Weight Active Weight

Federal 19.42% 45.88% (26.46%)

Provincial 44.86% 25.24% 19.62%

Municipal 11.36% 1.43% 9.93%

Corporate 24.36% 26.50% (2.14%)


12

Canadian Equity Global Equity Fixed Income Cash-0.20%

-0.10%

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

AllocationSelectionInteraction

SIAS Portfolio Attribution Q1 2011Portfolio Return: 3.08% | Benchmark Return: 2.66% | Excess Return: 0.42%


13

Canadian Equity Global Equity Fixed Income Cash & Equivalents

-0.05%

0.00%

0.05%

0.10%

0.15%

0.20%

0.25%

0.30%


SIAS Portfolio Attribution Q1 2011Excess Return: 0.85%

* Excludes currency effect


14

Canadian Portfolio Attribution Q1 2011Fi

nanc

ials

Ener

gy

Mat

eria

ls

Cons

umer

S

Indu

stri

als

Hea

lth C

are

Util

ities

Cons

umer

D

Info

rmati

on T

Tele

com

-0.50%

-0.10%

0.30%

0.70%

1.10%

Allocation

Selection

InteractionCo

nsum

er

Stap

les

Cons

umer

D

iscr

etion

ary

Info

rmati

on

Tech

nolo

gy

Portfolio Return: 6.35% | Benchmark Return: 5.62% | Excess Return: 0.73%


15

Canadian Equity Risk SummaryCo

nsum

er D

iscre

tiona

ry

Cons

umer

Sta

ples

Ener

gy

Fina

ncia

ls

Info

rmati

on T

echn

olog

y

Mat

eria

ls

Tele

com

mun

icatio

ns

Utiliti

es

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%Risk Weight Holding Weight Return Weight

Stress Tests Loss Amount Loss PercentageBlack Monday $ 574,990 14.45%September 11 $ 255,663 6.43%Flight to Quality $ 199,349 5.01%

Daily 99% VaR 2.01%

Tracking Error 2.93%

Information Ratio 2.26

Portfolio

Benchmark

12.68%

11.82%

Annualized Volatility

Daily 99% VaR (in dollars) $80,220


16

Global Equity Attribution Q1 2011

US Europe Asia Pacific Emerging Market-1.00%

-0.50%

0.00%

0.50%

1.00%

1.50%


Portfolio Return: 1.69% | Benchmark Return: 2.17% | Excess Return: (0.48%)

Portfolio α (in USD): 0.70% | Currency Effect: 1.18%

* Chart excludes currency effect


17

North America Europe Emerging Asian Pacific0.0000

0.1000

0.2000

0.3000

0.4000

0.5000

0.6000

0.7000

Risk Weight Holding Weight Return Weight

Global Equity Risk Summary

Stress Tests Loss Amount Loss PercentageBlack Monday $ 628,769 19.86%Flight to Quality $ 318,769 10.07%Russian Ruble Devalues $ 269,779 8.52%

Daily 99% VaR 2.35%Tracking Error 5.78%Information Ratio -0.09

Portfolio

Benchmark

13.32%

11.95%

Annualized Volatility

Daily 99% VaR (in dollars) $92,118


18

Fixed Income Attribution Q1 2011

(In %) Return Yield Duration Convexity

Portfolio 0.41 3.14 5.23 0.62

Benchmark (0.27) 3.27 6.07 0.77

Active 0.68 (0.13) (0.83) (0.16)

Total Return Yield Return Shift Twist Butterfly Credit Spread Convexity -4.00

-2.00

0.00

2.00

4.00

0.68

-2.47

3.36

-0.99

2.24

-1.44

-0.03

Portfolio Return: 0.41% | Benchmark Return: (0.27%) | Excess Return: 0.68%


19

0-1 1-3 3-5 5-10 10+0

5

10

15

20

25

30

35

40

Bench Port

Duration Structure

Underweight due to expected yield curve increase for mid-term and long-term bonds.Overweight


20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15-0.50

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

Yield Curve ChangeBeg YieldEnd Yield

Yield Curve Movement in Q1 2011

0-1 1-3 3-5 5-10 10+

-10-505

101520

Dur

ation

Mis

mat

ch

Down shiftof yield curve

Up shiftof yield curve


21

Future Process and Strategy

Interest rate forecast Movement of portfolio value Strategy formulating

Credit

Credit forecast Sector Analysis Fundamental criteria

Bond selection

Interest Rate


22

9

9.5

10

10.5

11

11.5

12

-8 -7 -6 -5 -4 -3 -2 1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 2485

90

95

100

105

110

115

120

125

Kobe 1995

Senda 2011

Day

Nikkei Post-Kobe & Sendai EarthquakeIn

dex

Eart

hqua

ke

even

t =

100

Jan 31 - Unexpected earnings inflated stock price

Mar 11 - Japanese stock market crashed after the

earthquake

Event Date

Nik

kei I

ndex

ETF


23

JapanCurrent Price: US$ 10.32 | Recommendation: Underweight | Target Price: US$ 9.81 – US$ 10.58 | NYSE Ticker: EWJ | As of March 31, 2011

Future Outlook

• Infrastructures and Constructions Sector (Good)

• Long-term Effects Due to Nuclear Leakage

• Large Public Sector Debts

• Slow GDP Growth Rate


24

1-Nov-10 1-Dec-10 1-Jan-11 1-Feb-11 1-Mar-11 1-Apr-1112.00

13.50

Sing

apor

e

51.00

61.00

71.00

Kore

a

17.00

20.00

Hon

g Ko

ng

Korea, Hong Kong and Singapore all drop more than 5%

Korea recovered after Japanese earthquake while other indexes remained weak

Asia-Pacific Ex Japan

Strong demand for Korean electronics and auto products

Expected recovery for Hong Kong and Singapore


25

Libya’s Impact on Energy Stocks

Dec 10 Jan 11 Feb 11 Mar 11 Apr 1185

95

105

115

WTI Crude Oil


100

115

130

Brent Crude Oil

Dec 10 Jan 11 Feb 11 Mar 11 Apr 1133.0035.0037.0039.0041.0043.0045.0047.0049.00

Suncor Energy Inc.

Q1 Return: 13.8%

Dec 10 Jan 11 Feb 11 Mar 11 Apr 1123.00

27.00

31.00

35.00

Canadian Oil Sands Ltd.

Q1 Return: 24.4%


32.00

36.00

40.00

Cenovus Energy Inc.

Q1 Return: 15.7%

The crisis in Libya, the world’s 15th largest crude oil exporter, lead to a surge in oil prices


Husky Energy Inc.

Q1 Return: 12.1%

Change:14.4%

Change23.2%


26

Global Oil Supply Disruptions

Saudi Fire Damage (1977)

Iraq War (2003)

Libya Crisis (2011)

Tapline Damage (1970)

Six Day War (1967)

Suez War (1956)

Venezuela Unrest (2002)

Arab Oil Embargo (1973)

Iran-Iraq War (1980)

Iranian Revolution (1978)

0.0 1.0 2.0 3.0 4.0

Millions Barrels Per Day

by Average Gross Supply Losses

Source: EIA, BofA Merrill Lynch Global Commodities Research (Feb 2011)


27

Agrium Inc.

Summary of Report

Profitability and liquidity lagging

behind comparable companies.

Fundamentals of

company are strong but stock is fairly

priced.

Original purchase price: $77.80

Nov-2010

Nov-2010

Nov-2010

Nov-2010

Nov-2010

Dec-2010

Dec-2010

Dec-2010

Dec-2010

Jan-2011

Jan-2011

Jan-2011

Jan-2011

Jan-2011

Feb-2011

Feb-2011

Feb-2011

Feb-2011

Mar-2011

Mar-2011

Mar-2011

Mar-2011

Apr-2011

Apr-2011

Apr-2011

Apr-2011

May-2011

75

80

85

90

95

100

Mar 21: Reduce to marketReturn 10.5%

Dec 15: $81.12

Feb 09: Earnings release

Feb 14: $97.10

2-month Return: 19.7%

Mar 03: Review

Sale Price: CN$ 86.00 | Recommendation: Market-weight | Target Price: CN$ 85-90 | TSX: AGU | As of March 21, 2011


28

Inmet Mining Corp.

Summary of Report

Concerns over recent company events and

higher than usual volatility.

Company

fundamentals are still strong, stock is fairly

priced.

Original purchase price: $57.90

Nov-2010

Nov-2010

Nov-2010

Nov-2010

Nov-2010

Dec-2010

Dec-2010

Dec-2010

Dec-2010

Jan-2011

Jan-2011

Jan-2011

Jan-2011

Jan-2011

Feb-2011

Feb-2011

Feb-2011

Feb-2011

Mar-2011

Mar-2011

Mar-2011

Mar-2011

Apr-2011

Apr-2011

Apr-2011

Apr-2011

May-2011

55

60

65

70

75

80

85

Mar 21: Reduce to marketReturn: 15.3%

Nov 30: $61.92

Jan 12: Lundin merger

Feb 27: Rival bid from Equinox

Mar 04: Panama law repeal

2-month Return: 20.6%

Sale Price: CN$ 66.76 | Recommendation: Market-weight | Target Price: CN$ 61-65 | TSX: IMN | As of March 21, 2011


29

Sherritt International Corp.

Shares: +15,000SIAS weight:2.97%S&P/TSX weight: 0.14%

Nov 10 Dec 10 Jan 11 Feb 11 Mar 11 Apr 11 May 117.00

7.50

8.00

8.50

9.00

9.50

10.00Purchase

Transaction Details

Purchase Price: CN$ 7.93 | Recommendation: Overweight | Target Price: CN$ 16.75| TSX: S | As of March 21, 2011

Value Drivers

Q4 Earnings Exceeding market consensus

Relative Value Undervalued based on metrics

Low Cost Producer

Inputs produced, operated as by-products

Ambatovy Mine World’s largest laterite nickel mine


US Portfolio RebalanceSold Purchased

Security Weight* Security Weight**S&P 500 ETF 31.19% US Financials ETF 4.08%

US Industrials ETF 3.07%

US Utilities ETF 3.11%

Costco 2.37% Consolidated Edison 4.13%

Union Pacific 2.84% Ford 4.29%

Visa 4.29%

ATT 4.39%

Citigroup 4.06%

Cisco 4.05%

*Prior to Transaction **Post Transaction

30


31

US Portfolio Rebalance

HEALTH CARE SELECT SECTOR SPDR

9%

SPDR TR UNIT SER

1 STAND-ARD &31%

TECHNOLOGY SELECT SECTOR SPDR

9%

Utilities 3%

Technology 9%

Industrials3%

Financials4%

Health Care9%

Pre-Trade Post-Trade

Stock

Sector ETF


32

Cisco Systems Inc.

Summary of Report

Backbone of the internet, and

communication today.

Has fallen out of favour with investors

over competitive concerns and avenues

for growth.

Trading very cheaply at 13x earnings.

Mar-10

Mar-10

Apr-10

Apr-10

May-10

May-10

May-10

Jun-10

Jun-10Jul-1

0Jul-1

0Jul-1

0

Aug-10

Aug-10

Sep-10

Sep-10

Sep-10

Oct-10

Oct-10

Nov-10

Nov-10

Nov-10

Dec-10

Dec-10Jan

-11Jan

-11Jan

-11

Feb-11

Feb-11

Mar-11

Mar-11

10x

12x

14x

16x

18x

20x

22x

24x

26x

$10$12$14$16$18$20$22$24$26$28$30

P/E CSCO


US Strategy

Sector US Bench Weight SIAS US Weight Active Weight

Info-Tech 17.88 30.65 12.77

Sector Blended* Bench Weight Blended SIAS Weight Active Weight

Info-Tech 8.05 12.59 4.54

*Blended 63% S&P/TSX, 37% S&P 500

33

• US Portfolio complements Canadian Portfolio• US Companies with foreign revenues• Overweight Info-Tech


34

world Advanced Economies

Emerging Economies

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

GDP Growth Rate

2010 2011

Per

cen

t (%

)

2000200120022003200420052006200720082009201020115.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

Unemployment Rate

Advanced Economies Emerging Economies

Outlook of World Economics

World


35

Emerging Market

Jan 2011 Feb 2011 Mar 201144.00

46.00

48.00

Value of index drops more than 3%

Slow recovery results in break-even for 2011 Q1 Future Outlook

Large volatility expected

Invest with caution Risk-adjusted

return

Current Price: US$ 48.67 | Recommendation: Market-weight | Target Price: US$ 48.52 – US$ 50.20 | NYSE: EEM | As of March 31, 2011


36

European Sovereign Debt Problem

Ireland – 94%(105%)

United Kingdom – 77%

(86%)

Portugal – 83%(92%)

Spain – 63%(79%)

France – 84%(90%)

Germany – 75%(77%)

Austria – 70%(75%)

Italy – 118%(120%)

Greece – 130%(144%)

91% or more

81% – 90%

71% – 80%

70% or less

(2013 Forecast in brackets)

Gross government debt as % of GDP 2010

Sovereign risk fears


37

Europe

Jan 2011 Feb 2011 Mar 201138.00

40.00

42.00

Germany: +5% return UK: steady uptrend

Lightly affected by Japan earthquake

Confirmation of mature and stable stock market

Future Outlook

Credit risk problems resolved?

Multiples are low in comparison to historical values

Current Price: US$ 41.82 | Recommendation: Market-weight | Target Price: US$ 42.50 – US$ 46.53 | NYSE: IEV | As of March 31, 2011


38

Oil Price and Economic Recession

1970 1975 1980 1985 1990 1995 2000 2005 20100

20

40

60

80

100

120

140

160

Recessions Often Follow Oil Supply Shocks

Oil Price, WTI


39

Sector Current Q2 Allocation Q3 Allocation Long Term

Asia Pacific ex-Japan Over Over Market Over

Japan Under Under Under Under

Europe Under Under Market Market

Emerging Market Over Over Over Market

Asia

• Large drop in Jan. and Feb.

• Korea continue to outperform

Japan

• Slow recover• Currency

fluctuation

Europe

• UK and Germany outperform

• Debt crisis

EM

• Volatility continue to negatively effect return

Global Sector Allocations


40

Sector Current Q2 Allocation Q3 Allocation Long Term

Energy Underweight Market Overweight Overweight

Financials Market Market Market Market

Materials Overweight Overweight Overweight Overweight

Energy

• Alternative energy: uranium stocks

• Small/mid cap stocks

Financials

• Insurance companies• Asset management

companies

Materials

• Reduce base metals• Opportunities in

precious metals

Canadian Sector Allocations


41

Asset Allocation

IPS Strategic Q1 End Target Change

Cash 2% 1.9% 0.2% -1.7%

Canadian Equity 35% 37.9% 37.5% -0.4%

Global Equity 35% 35.3% 35.9% 0.6%

Fixed Income 28% 24.9% 26.4% 1.5%

42

Contact Information

Simon Fraser UniversityBeedie School of Business500 Granville StreetVancouver, CanadaTel +1 (778) 782-5209

43

Disclosures

Ownership and material conflicts of interest:The author(s), or a member of their household, of this report does not hold a financial interest in the securities of this company.The author(s), or a member of their household, of this report does not know of the existence of any conflicts of interest that might bias the content or publication of this report.Receipt of compensation:Compensation of the author(s) of this report is not based on investment banking revenue.Position as a officer or director:The author(s), or a member of their household, does not serves as an officer, director or advisory board member of the subject company.Market making:The author(s) does not act as a market maker in the subject company’s securities.Disclaimer:The information set forth herein has been obtained or derived from sources generally available to the public and believed by the author(s) to be reliable, but the author(s) does not make any representation or warranty, express or implied, as to its accuracy or completeness. The information is not intended to be used as the basis of any investment decisions by any person or entity. This information does not constitute investment advice, nor is it an offer or a solicitation of an offer to buy or sell any security. This report should not be considered to be a recommendation by any individual affiliated with Simon Fraser University with regard to these securities.

44

AppendixEvents

NIBC

R.I.S.E.

GIRC

Global Portfolio

Global Portfolio Overview

Global Future Strategy

Recovery of European Economy

European Stock Markets

Japan Yen Intervention

Libya & Crude Oil


Fixed Income

Fixed Income Performance to Date

Bond Selection Process

Trade Research Report

Interest Rate Forecast

Yield Curve Fitting

Actual vs Implied Forward Rate

Canadian Portfolio

Canadian Portfolio Trade Risk

Canadian Equity - Historical

Energy Holdings

Financial Holdings

Material Holdings

Strategies for Other Sectors

US Portfolio

Costco Wholesale

US Portfolio Trade Risk

Performance and Risk

5-year Portfolio

Excess Return

Portfolio Composition

Canadian Composition

Global Composition

US Composition

Fixed Income Compositions

Portfolio Attribution

Canadian Attribution

Canadian Risk

Global Attribution

Global Risk

Fixed Income

Fixed Income Attribution

Duration Structure

Yield Curve Movement

Future Process and Strategy

Japan and Libya

Nikkei Post Earthquake

Japan

Asia-Pacifica Ex Japan


Global Oil Supply Disruptions

Agrium

Inmet

Canadian and US Trades

Sherritt

US Portfolio - Table

US Portfolio - Pie

Cisco

US Complements Canada

Outlook of World Economics

Emerging Market

The Future

European Sovereign Debt

Europe

Oil Prices and Economics

Equity Sector Allocations

Equity Sector Allocations

Asset Allocation

45

National Investment Banking Competition

67 teams across Canada 2nd Place achievement for SFU team comprised of MFRM/SIAS students

46

Redefining Investment Strategy Education XI

World’s largest student investment forum The SIAS Fund placed 2nd in the Balanced Fund category Tremendous feedback for SIAS and SFU

47

CFA’s Investment Research Challenge

6 competitors in the first-ever British Columbia’s Investment Research Challenge 40 competitors in the America Region Question and Answer session with Warren Buffett

Macro Events Canadian Equity Global Equity US Equity ConclusionFixed IncomeAppendix

48

Global Portfolio Overview

Name 2011 Q1 Return Sharpe Ratio P/B Market Cap

ISHARES MSCI GERMANY INDEX FUND 7.28% 0.83 1.65 4.2 Billion

ISHARES S&P EUROPE 350 INDEX FUND 5.61% N/A 2.55 1.4 Billion

ISHARES MSCI SOUTH KOREA INDEX FUND 4.16% 1.05 1.62 5.4 Billion

ISHARES MSCI AUSTRALIA INDEX FUND 4.03% 0.61 2.16 3.6 Billion

ISHARES MSCI UNITED KINGDOM INDEX FUND 3.41% 0.6 1.87 1.4 Billion

ISHARES MSCI EMERGING MARKETS INDEX FUND 1.19% 0.81 2.16 41.5 Billion

ISHARES MSCI BRIC INDEX FUND 0.79% 0.58 2.03 1.2 Billion

ISHARES MSCI SINGAPORE INDEX FUND (1.94%) 1.18 1.85 2.0 Billion

ISHARES MSCI HONG KONG INDEX FUND (2.22%) 1.08 1.51 2.0 Billion

ISHARES MSCI JAPAN INDEX FUND (6.34%) 0.09 1.12 7.6 Billion


49

Global Future Strategy

Movement to Mean Variance Frontier

Primary Screening

Price-to-book and Sharpe Ratio

MV Frontier

New Standardized Selection Procedure

0.025 0.026 0.027 0.028 0.029 0.0302.00

2.10

2.20

2.30

2.40

2.50

2.60

2.70

Risk (Standard Deviation)Ex

pect

ed R

etur

n (1

0 x

E3)

SIAS


50

UK Sweden Germany France Italy Spain Greece Portugal Ireland Turkey Poland Hungary

-4

-2

0

2

4

6 Projected GDP Growth Rate

20112012

Perc

ent (

%)

UK Sweden Germany France Italy Spain Greece Portugal Ireland Turkey Poland Hungary0

5

10

15

20

25 Projected Unemployment Rate

20112012

Perc

ent (

%)

Recovery of European Economy

Source: International Monetary Fund (April 2011)


51

A Shadow Over European Stock Markets

Greece

Brazil

Portugal

Italy

Australia

Russia

Britain

Ireland

China

Spain

France

Austria

Germany

United States

0 10 20 30 40 50 60 70

20102000


52

Japan Yen Intervention

199919992000200120022003200420052006200720082009201020100

1

2

3

4

5

6

7

8

Intervention Amount (Trillion Yen)

Mar 09 Mar 10 Mar 1170

80

90

100

110

Dollar Yen Exchange Rate(in Yen)

By the G7 Countries


53

Libya & Crude Oil

Global Crude Oil Production and Exports % of Global Production % of Global Exports

Top 5 Producers

Russia 13% 13%

Saudia Arabia 11% 15%

U.S. 7% 0%

Iran 6% 5%

China 5% 0%

Other OPEC Members

Iraq 3% 5%

Kuwait 3% 3%

Nigeria 3% 5%

Angola 3% 4%

Algeria 2% 3%

Libya 2% 3%

Qatar 1% 2%

A significant portfolio of the world’s production of crude oil comes from countries in the Middle East and Africa Region


54



95

105

115

WTI Crude Oil


100

115

130

Brent Crude Oil

Dec 10 Jan 11 Feb 11 Mar 11 Apr 1133.0035.0037.0039.0041.0043.0045.0047.0049.00

Suncor Energy Inc.

Correlation:92.3%


27.00

31.00

35.00

Canadian Oil Sands Ltd.

Correlation:72.8%


32.00

36.00

40.00

Cenovus Energy Inc.

Correlation:92.7%

Correlations (As of April 30, 2010 to April 30, 2011)


Husky Energy Inc.

Correlation:74.7%


55

Fixed Income Performance To Date

May, 2003 May, 2004 May, 2005 May, 2006 May, 2007 May, 2008 May, 2009 May, 2010-3.00

-2.00

-1.00

0.00

1.00

2.00

3.00

4.00

5.00

Mon

thly

Ret

urns

QTD 1-year 3-year 5-year Since Inception

0.41% 5.17% 14.35% 26.10% 58.66%

As of March 31, 2011


56

Fixed Income Attribution Q1 2011

(in bps) Total Return

Yield Return Shift Twist Butterfly Credit

Spread Convexity

Portfolio 0.41 0.58 (0.69) 0.24 (0.53) 0.81 0.00

Bench (0.27) 3.05 (4.05) 1.23 (2.77) 2.25 0.03

Active Return 0.68 (2.47) 3.36 (0.99) 2.24 (1.44) (0.03)

Yield Duration Convexity

Portfolio 3.14 5.23 0.62

Benchmark 3.27 6.07 0.77

Active -0.13 -0.83 -0.16


57

Bond Selection Process

Interest rate

forecast

Determine appropriate

strategy

Credit analysis on

bond sectors

Optimal bond

selection

Hi

ghest Yi

el

d

Select stock with the highest yield in the appropriate bond sector

Int

rinsic Val

ue

Value bond through pricing methods Example: Yield Curve FittingSelect bond that is undervalued

Transaction Cost

Calculate potential transaction cost for each bond purchaseSelect bond with the lowest transaction cost

Optimal Bond Selection Criteria


58

Trade Research Report

• Key Rate Duration match to the benchmark• Selected highest yield bond within duration

range

Risk analysis to determine possible bond quality

Interest rate analysis, shows favorable duration mismatch for short term bonds

• Bond downgrade risk analysis• Canadian credit rating history to

understand possibility of downgrade


59

Interest Rate Forecast

Interest Rate

Forecast

Yield Curve Fitting

Implied Forward

RateRegression

(2001 – 2010)

Regression tests are run against the following Indices:

• Consumer Price Index

• S&P / TSX Index• US/CDN Foreign

Exchange


60

Interest Rate Forecast: Yield Curve Fitting

0.25 0.30.35 0.4

0.45 0.50.55

0.600000000...

0.650000000...

0.700000000...

0.750000000... 0.8

0.850000000... 0.9

0.950000000... 10.00

0.50

1.00

1.50

2.00

2.50

Spot / Forward Rate

spot fwd

Year

0.25

0.5 1 2 3 4 5 7 8 9 10 15 20 300.00

1.00

2.00

3.00

4.00

5.00

Implied Forward Rate

spot fwd Trend (forward)

Year

As of April 18, 2011


61

Actual vs. Implied Forward Rate

0 10 20 30 40 50 60 700

1

2

3

4

5

3 months Actual versus Implied Forward Rate

Actual 3 months spotImplied Forward 3 Months

Time

Inte

rest

rate

2005 - 2010

0 10 20 30 40 50 60 700

2

4

6

6 months Actual versus Implied Forward Rate

Actual rateImplied Forward Rate

Time

Inte

rest

rate

0 10 20 30 40 50 60 70 800

1

2

3

4

5

Actual rateImplied Forward rate

Time

Inte

rest

rate

1 Year Actual versus Implied Forward Rate

The effectiveness of implied forward rate deteriorates as time to maturity increases.


62

Canadian Portfolio Trade Risk

Tracking Errors

Volatility

VaR

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%

2.63%

10.23%

2.00%

2.53%

8.14%

2.02%

Before Trade After Trade

After Trade

Before Trade

1.80

0.43

Information Ratio

Trade Risk Overview

Expected 1-year return for stocks Higher risk-adjusted return after

trade

Agrium Inmet Sherritt0%

40%

80%

120%

Risk-Return Tradeoff

MVaR Volatility Expected Return


Canadian Equity – Historical Returns

* Annualized

Portfolio Benchmark Active

3-months 6.35% 5.62 0.73%

6-months 17.34% 15.57% 1.77%

9-months 31.97% 27.44% 4.53%

1-year 21.13% 20.43% 0.70%

3-years* 5.79% 5.02% 0.77%

3-years 18.40% 15.83% 2.57%

5-years* 6.68% 6.07% 0.61%

5-years 38.17% 34.27% 3.91%

63


64

Energy Holdings

Company Q1Weight

BenchmarkWeight

QuarterlyReturn

Q1Price

CurrentPrice*

SUNCOR ENERGY 6.00% 4.10% 13.83% $43.48 $40.25

CANADIAN NATURAL RESOURCES

4.91% 3.11% 8.31% $47.94 $40.96

CANADIAN OIL SANDS 3.97% 0.88% 24.37% $32.67 $29.79

TRANSCANADA 2.78% 1.67% 4.60% $39.31 $42.66

CENOVUS ENERGY 2.92% 1.66% 15.74% $38.30 $34.57

ENCANA 2.61% 1.46% 16.02% $33.53 $33.25

ENBRIDGE 2.10% 1.39% 6.49% $59.42 $31.60

HUSKY ENERGY 0.85% 0.46% 12.07% $29.46 $28.49

* As of May 25, 2011


65

Company Q1Weight

BenchmarkWeight

QuarterlyReturn

Q1Price

CurrentPrice*

ROYAL BANK 7.37% 5.04% 15.73% $59.99 $59.50

TD BANK 5.96% 4.39% 16.51% $85.80 $84.40

BANK OF NOVA SCOTIA 4.70% 3.90% 4.19% $59.49 $58.47

CANADIAN REIT 2.87% 0.14% 12.80% $34.65 $33.27

GREAT-WEST LIFECO 2.01% 0.43% 3.06% $26.90 $26.39

MANULIFE FINANCIAL 1.80% 1.99% 0.86% $17.18 $16.98

ONEX CORPORATION 1.60% 0.19% 12.54% $33.99 $37.11

IGM FINANCIAL 1.37% 0.30% 14.66% $49.31 $49.41

BROOKFIELD ASSET 0.81% 1.02% -4.71% $31.51 $31.79

Financial Holdings

* As of May 25, 2011


66

Material HoldingsCompany Q1

Weight Benchmark

WeightQuarterly

ReturnQ1

PriceCurrentPrice*

FIRST QUANTUM 4.57% 0.62% 16.13% $125.42 $131.67

BARRICK GOLD 4.47% 3.09% -4.92% $50.39 $46.13

POTASH CORPORATION 3.20% 3.08% 11.15% $57.19 $53.17

YAMANA GOLD 3.02% 0.56% -5.95% $11.98 $12.30

INMET MINING 3.00% 0.23% -11.79% $68.15 $69.05

TECK RESOURCES 2.89% 1.75% -16.83% $51.39 $48.51

AGRIUM INC 2.14% 0.90% -2.15% $89.53 $81.68

GOLDCORP INC 2.01% 2.21% 5.59% $48.34 $48.74

SHERRITT INTERNATIONAL

0.33% 0.16% 0.86% $7.96 $6.61

* As of May 25, 2011


67

Strategies for Other Sectors

Sector Q1 SIAS Weight Q1 TSX Weight Q1 Active Weight

Tactical Asset Allocation Long Term View

Consumer Staples 4.61% 2.46% 2.15% Overweight Market

Utilities 2.89% 1.62% 1.27% Overweight Market

Telecommunication 4.91% 4.02% 0.89% Market Market

Consumer Discretionary 4.64% 4.36% 0.28% Market Market

Information Technology 2.68% 2.57% 0.11% Market Market

Healthcare 0.00% 1.02% -1.02% Underweight Underweight

Industrials 0.00% 5.58% -5.58% Underweight Underweight


68

Costco Wholesale Corp

Summary

Looking to reduce overweight in

Consumer Staples.

Costco had been a good investment for

us, returning over 22% in 2010.

5 year average P/E of 22x

Currently trading at 27x Earnings.May

-09

Jun-09

Jun-09Jul-0

9

Aug-09

Sep-09

Oct-09

Oct-09

Nov-09

Dec-09Jan

-10

Feb-10

Feb-10

Mar-10

Apr-10

May-10

Jun-10

Jun-10Jul-1

0

Aug-10

Sep-10

Sep-10

Oct-10

Nov-10

Dec-10Jan

-11Jan

-11

Feb-11

Mar-11

Apr-11

May-11

40.00

45.00

50.00

55.00

60.00

65.00

70.00

75.00

80.00

85.00

90.00

COST


69

US Portfolio Trade Risk

Tracking Error

Volatility

VaR

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0%

5.2%

11.6%

2.3%

4.6%

10.9%

2.0%

Before Trade After Trade

Documents

Agenda 2 Presentation Question and Answer Intermission Feedback Session Keynote: Margaret Franklin Wine and Cheese