2013 Morningstar ® Andex ® Chart 1 Toronto Street, Suite 500 Toronto, Ontario M5C 2W4 +1 888 4-CHARTS www.andexcharts.com (15%) (20%) 40% 50% 55% 60% 65% 70% 45% (10%) (5%) (25%) (40%) (35%) (30%) 75% 80% 90% 85% 0% 35% 30% 25% 20% 15% 10% 5% (15%) (20%) 40% 50% 55% 60% 65% 70% 45% (10%) (5%) (25%) (40%) (35%) (30%) 75% 80% 90% 85% 0% 35% 30% 25% 20% 15% 10% 5% Past performance is no guarantee of future results. Assumes reinvestment of all income and no transaction costs or taxes. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. Government bonds and Treasury bills are guaranteed by the full faith and credit of the Canadian government as to the timely payment of principal and interest, while stocks are not guaranteed and have been more volatile than the other asset classes. Rolling period returns are a series of overlapping, contiguous periods of returns (12 months, 36 months, etc.) The first 12-month rolling period is January 1950–December 1950, the second is February 1950–January 1951, and so on. The balanced portfolio was created for illustrative purposes only. It is neither a recommendation, nor an actual portfolio. All income was reinvested and the portfolio was rebalanced every 12 months. Source: U.S. Large Stocks—Standard and Poor’s 90 ® index from 1926 through February 1957 and the S&P 500 index thereafter, which is an unmanaged group of securities and considered to be representative of the U.S. stock market in general; S&P/TSX Composite—Canadian Financial Markets Research Center for 1950–1955 and Standard and Poor’s/TSX Composite Index total return series thereafter, which replaced the TSE300 Total Return Index on May 1, 2002; DEX Long Bond Index—PC-Bond, a business unit of TSX, Inc.; Cash—90 Day Canada Treasury Bills, Bank of Canada. ©2013 Morningstar. All Rights Reserved. The reproduction of part or all of this chart without prior written consent from Morningstar ® is prohibited. $387 7.0% Dec 74 Mar 00 19.4% $3,470 $334 6.2% May 77 Oct 97 14.1% $1,408 $154 2.2% Dec 69 Sep 01 14.6% $1,534 $338 6.3% Dec 74 Feb 98 15.1% $1,656 $60 –5.1% Feb 09 Oct 00 22.7% $771 $132 2.8% Aug 10 Aug 87 19.5% $594 $125 2.3% Jun 10 Aug 87 18.6% $552 $110 1.0% Dec 59 Sep 91 18.3% $538 $68 –7.5% Feb 09 Jul 87 31.1% $388 $91 –1.9% Mar 03 Jul 87 27.8% $340 $102 0.4% Feb 09 Jul 87 27.8% $340 $95 –1.0% Sep 59 Sep 86 26.6% $325 $60 –15.7% Mar 03 Apr 98 34.4% $243 $70 –11.1% Aug 03 Nov 80 39.3% $270 $82 –6.5% Mar 03 Jul 87 30.4% $222 $79 –7.7% Sep 81 Jun 85 28.9% $214 $84 –15.9% Sep 81 Jun 83 55.6% $156 $61 –39.2% Jun 82 Jun 83 86.9% $187 $60 –40.2% Sep 74 Jul 83 56.8% $157 $76 –24.2% Sep 74 Jun 83 50.8% $151 73.6% 78.2% 82.7% 80.5% 1-year periods (751) 89.1% 83.9% 94.3% 90.3% 3-year periods (727) 98.4% 84.9% 100% 97.5% 5-year periods (703) 100% 92.6% 100% 100% 10-year periods (643) 100% 100% 100% 100% 20-year periods (523) Positive Returns Understanding the Graph Balanced Portfolio 30% Bonds 30% U.S. Large Stocks 30% Canadian Stocks 10% Cash Graph Legend S&P/TSX Composite Total Return Index DEX Long Bond Index Balanced Portfolio U.S. Large Stock Total Return Index in CAD Most Recent Return Median Return Best 5% Other 90% Worst 5% Rolling Period Risk and Return, January 1950–June 2013 U.S.A. Recessions 15% 10% 5% 0% 15% 10% 5% 0% 22.75% Inflation (Cost of Living) Prime Rate Government of Canada Long Term Bond Yield 6.7% 7.2% 8.7% 7.1% 12.7% 11.6% 2.4% unemployment 3.4% 6.2% 5.3% 6.7% 2% 0% (2%) 2% 0% (2%) Gross Domestic Product $0.90 $0.80 $1.00 $0.90 $0.80 $1.00 Canadian Dollar in USD $1.0852 Nov 6 up 75% since Jan 18 ‘02 low dollar peaks at $1.06 $0.6202 Jan 18 CLARK ST. LAURENT TRUMAN EISENHOWER DIEFENBAKER KENNEDY PEARSON JOHNSON NIXON FORD TRUDEAU CARTER TRUDEAU REAGAN MULRONEY CHRETIEN CLINTON BUSH MARTIN BUSH HARPER KC JT OBAMA Compound Annual Returns by Decade 18.2% 12.7% 1.0% 2.0% 2.4% 9.1% 10.0% 3.4% 4.5% 2.6% 6.8% 10.4% 7.6% 7.3% 7.6% 17.5% 12.2% 13.7% 11.9% 6.2% 20.8% 10.6% 11.6% 6.4% 2.1% –4.0% 5.6% 7.8% 3.1% 2.1% 100% 0% (100%) 100% 0% (100%) 3% Expansion (%) Contraction (%) Recovery (months) $100,000 $10,000 $1,000 $100 $260,597 13.4% $66,953 11.0% $36,417 9.9% $10,067 7.7% $6,065 6.8% $3,011 5.6% $996 3.7% $31,976 9.7% Growth of $100 with no acquisition costs or taxes and all income reinvested 30% 30% 30% 10% Canadian Stocks U.S. Large Stocks Bonds Cash Balanced Portfolio 2013 Morningstar ® Andex ® Chart U.S. Small Stock Total Return Index in CAD U.S. Large Stock Total Return Index in CAD S&P/TSX Composite Total Return Index Balanced Portfolio (60% Equity, 40% Fixed Income) DEX Long Bond Index 5 Year Guaranteed Investment Certificates 90 Day Canada Treasury Bills Consumer Price Index (Cost of Living) World Markets ex-U.S. Total Return Index in CAD Percentage Returns (June 30, 2013) 1 Yr 4.8 11.3 –10.3 4.1 18.8 1.7 0.9 1.5 –8.9 3 Yr 13.8 11.3 6.7 8.0 12.1 1.9 0.7 1.8 2.1 5 Yr –1.0 –0.7 –0.7 2.0 9.5 2.3 1.3 1.7 –6.0 10 Yr 3.4 1.2 7.6 5.5 9.0 2.7 2.2 2.0 1.9 20 Yr 10.6 7.5 8.7 8.0 9.7 4.2 3.5 1.9 5.1 30 Yr 11.1 10.7 10.3 10.7 12.2 6.4 5.8 2.7 9.0 Since Jan 1, 1950 13.4 11.0 9.9 9.7 7.7 6.8 5.6 3.7 — Risk Since 1950 24.7 17.5 17.1 10.2 9.8 3.5 4.0 — — Since Jan 1, 1970 12.2 5.5 4.9 0.6 1.0 3.3 1.9 # 8.0 Risk Since 1970 24.0 7.4 2.3 1.2 2.6 2.8 0.5 — 7.8 * since 1970 Worst 5 Yrs –14.1 –7.5 –1.9 0.4 –1.0 2.3 0.9 — –7.0 * Avro Arrow terminated Canada’s first TV broadcast Canada/U.S. auto pact signed OAS starts for those over 70 OAS reduced from 70 to 65 capital gains tax Chrysler bailout Parti Québécois wins provincial election Canada/U.S. free trade approved Berlin Wall torn down capital gains exemption introduced capital gains exemption frozen at $100,000 O&Y bankruptcy Bre-X PCs fall from 169 to 2 seats Russian debt default Confed Life fails GST starts 2nd Quebec referendum 50.4% vote NO Enron WorldCom CPP/QPP approved Northland Bank & Canadian Commercial Bank go bankrupt capital gains exemption eliminated CBC’s first colour TV broadcast Mexican peso crisis Asian currency crisis 9/11 attacks Nortel low $0.67 Income Trust tax 30% foreign content rule eliminated Nortel high $124.50–34.2% of TSE 300 GM and Chrysler files for bankruptcy Lehman Bros bankruptcy U.S. debt downgraded by S&P largest TSE 300 company BCE Inc. 6.6% 1st Quebec referendum 60% vote NO Korean War Ontario’s top marginal tax rate 82.4% to 59.5% 46.4% 46.4% 50.3% Wall Street Reform Act Japan tsunami iPhone Winter Olympics population (over 65) 14.8% population (over 65) 7.8% population 34,670,352 population 13,712,000 1st class stamp 63¢ +GST 1st class stamp 4¢ life expectancy M: 78.8, F: 83.3 life expectancy M: 66.5, F: 71.0 avg family income $91,000 avg family income $38,059 avg family income $12,716 min wage $10.25 min wage $6.85 min wage $2.90 min wage $1.00/hr birth of Parti Québécois 5 year mortgage 21.5% 5 year GIC 17.5% gov’t of Canada 20 yr bond 17.75% National Energy Program Maple Leaf gold coin U.S. subprime crisis Black Monday RIM rebranded as Black Berry TFSA started with a limit of $5,000 $5,500 RRSP started with a limit of $2,500 $7,500 $11,500 $13,500 $14,500 $13,500 $12,500 $14,500 $16,500 $15,500 $18,000 $5,500 $19,000 $20,000 $4,000 $21,000 $22,000 $22,450 $22,970 195 104 284 509 297 500 850 1,011 725 713 gold's fixed price of $35 U.S. per oz abandoned 253 482 1,895 Arab oil embargo BP oil spill 77.72 113.39 30.28 145.31 50.51 77.05 37.22 10.82 40.65 10.40 31.70 38.34 14.23 4.11 12.60 oil $2.57 U.S. per barrel 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 10 11 12 13 Past performance is no guarantee of future results. Hypothetical value of $100 invested at the beginning of 1950. Assumes reinvestment of all income and no transaction costs or taxes. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. Government bonds and Treasury bills are guaranteed by the full faith and credit of the Canadian government as to the timely payment of principal and interest, while stocks are not guaranteed and have been more volatile than the other asset classes. Furthermore, small stocks are more volatile than large stocks and are subject to significant price fluctuations, business risks, and are thinly traded. International investments involve special risks such as fluctuations in currency, foreign taxation, economic and political risks, liquidity risks, and differences in accounting and financial standards. Canadian recessions are defined as two or more consecutive quarters of negative GDP, while U.S. recession data is from the National Bureau of Economic Research (NBER). Gold prices are from London Bullion Market Association and represent the London P.M. daily closing prices per troy ounce. Oil prices are for West Texas Intermediate Crude per barrel from Morningstar. Gold and oil prices quoted in U.S. dollars. The balanced portfolio was created for illustrative purposes only. It is neither a recommendation, nor an actual portfolio. All income was reinvested and the portfolio was rebalanced every 12 months. Returns are compound annual returns, and risk is calculated as the standard deviation of calendar-year returns. The worst 5-year calculations are out of 703 (463 for World Markets ex U.S. stocks) rolling 60-month periods. Source: U.S. Small Stocks—Ibbotson ® Small Company Stock index; World Markets ex U.S.—Morgan Stanley Capital International (MSCI) World ex U.S. index; U.S. Large Stocks—Standard and Poor’s 90 index from 1926 through February 1957 and the S&P 500 index thereafter, which is an unmanaged group of securities and considered to be representative of the U.S. stock market in general; S&P/TSX Composite—Canadian Financial Markets Research Center for 1950–1955 and Standard and Poor’s/TSX Composite index total return series thereafter, which replaced the TSE300 Total Return index on May 1, 2002; DEX Long Bond Index—PC-Bond, a business unit of TSX, Inc.; 5 Year Guaranteed Investment Certificates—Bank of Canada; 90 Day Canada Treasury Bills—Bank of Canada; Consumer Price Index—Statistics Canada; Gross Domestic Product—Bank of Canada for 1950–1992 and Statistics Canada thereafter. The second-quarter 2013 GDP value is an average analysts’ estimate; Canadian Dollar in U.S. Dollars—Bank of Canada; Prime Rate—Bank of Canada; Government of Canada Long Term Bond Yield—Bank of Canada. ©2013 Morningstar. All Rights Reserved. The reproduction of part or all of this chart without prior written consent from Morningstar ® is prohibited. CANADIAN RECESSIONS SAMPLE SAMPLE