2013 Morningstar® Andex® Chart

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(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. Assum

es reinvestment of all incom

e and no transaction costs or taxes. This is for illustrative purposes only and not indicative of any investm

ent. An investment cannot be m

ade directly in an index. Government bonds and Treasury bills are guaranteed by the full faith

and credit of the Canadian government as to the tim

ely payment of principal and interest, w

hile 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 m

onths, 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 w

as created for illustrative purposes only. It is neither a recom

mendation, nor an actual portfolio. All incom

e was reinvested and the portfolio w

as 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 unm

anaged group of securities and considered to be representative of the U.S. stock m

arket in general; S&P/TSX Com

posite—Canadian Financial M

arkets Research Center for 1950–1955 and Standard and Poor’s/TSX Com

posite Index total return series thereafter, which replaced the TSE300 Total Return Index on M

ay 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 w

ritten consent from M

orningstar ® is prohibited.

$3877.0%Dec 74

Mar 00

19.4%$3,470

$3346.2%M

ay 77

Oct 9714.1%$1,408

$1542.2%Dec 69

Sep 0114.6%$1,534

$3386.3%Dec 74

Feb 9815.1%$1,656

$60–5.1% Feb 09

Oct 0022.7%$771

$1322.8%Aug 10

Aug 8719.5%$594

$1252.3%Jun 10

Aug 8718.6%$552

$1101.0%Dec 59

Sep 9118.3%$538

$68–7.5% Feb 09

Jul 8731.1%$388

$91–1.9% M

ar 03

Jul 8727.8%$340

$1020.4%Feb 09

Jul 8727.8%$340

$95–1.0% Sep 59

Sep 8626.6%$325

$60–15.7% M

ar 03

Apr 9834.4%$243

$70–11.1% Aug 03

Nov 80

39.3%$270

$82–6.5% M

ar 03

Jul 8730.4%$222

$79–7.7% Sep 81

Jun 8528.9%$214

$84–15.9% Sep 81

Jun 8355.6%$156

$61–39.2% Jun 82

Jun 8386.9%$187

$60–40.2% Sep 74

Jul 8356.8%$157

$76–24.2% Sep 74

Jun 8350.8%$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 G

raph

Balanced Portfolio

30% Bonds

30% U.S. Large Stocks

30% Canadian Stocks

10% Cash

Graph Legend

S&P/TSX Com

posite Total Return Index

DEX Long Bond IndexBalanced PortfolioU.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 RateGovernment 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

$1.00Canadian Dollar in USD

$1.0852 Nov 6

up 75% sinceJan 18 ‘02 low

dollar peaks at $1.06

$0.6202 Jan 18

CLARKST. LAURENTTRUMAN EISENHOWER

DIEFENBAKERKENNEDY

PEARSONJOHNSON NIXON FORD

TRUDEAUCARTER

TRUDEAUREAGAN

MULRONEY CHRETIENCLINTON BUSH

MARTINBUSH

HARPERKCJT

OBAMA

Compound Annual Returns by Decade18.2% 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

$260,59713.4%

$66,95311.0%

$36,4179.9%

$10,0677.7%

$6,0656.8%

$3,0115.6%

$9963.7%

$31,9769.7%

Growth of $100with no acquisition costs or taxesand all income reinvested

30%30%

30%10%

Canadian StocksU.S. Large Stocks

BondsCash

Balanced Portfolio

2013 Morningstar® Andex® Chart

U.S. Small Stock Total Return Index in CADU.S. Large Stock Total Return Index in CADS&P/TSX Composite Total Return Index

Balanced Portfolio (60% Equity, 40% Fixed Income)

DEX Long Bond Index5 Year Guaranteed Investment Certificates90 Day Canada Treasury BillsConsumer Price Index (Cost of Living)

World Markets ex-U.S. Total Return Index in CAD

Percentage Returns (June 30, 2013)1 Yr

4.811.3

–10.3

4.1

18.81.70.91.5

–8.9

3 Yr

13.811.36.7

8.0

12.11.90.71.8

2.1

5 Yr

–1.0–0.7–0.7

2.0

9.52.31.31.7

–6.0

10 Yr

3.41.27.6

5.5

9.02.72.22.0

1.9

20 Yr

10.67.58.7

8.0

9.74.23.51.9

5.1

30 Yr

11.110.710.3

10.7

12.26.45.82.7

9.0

SinceJan 1,1950

13.411.09.9

9.7

7.76.85.63.7

—

RiskSince1950

24.717.517.1

10.2

9.83.54.0—

—

SinceJan 1,1970

12.25.54.9

0.6

1.03.31.9

#

8.0

RiskSince1970

24.07.42.3

1.2

2.62.80.5—

7.8*since 1970

Worst5 Yrs

–14.1–7.5–1.9

0.4

–1.02.30.9—

–7.0*

Avro Arrow terminated

Canada’s first TV broadcastCanada/U.S. auto pact signed

OAS starts for those over 70 OAS reduced from 70 to 65capital 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 & CanadianCommercial Bank go bankrupt

capital gains exemption eliminated

CBC’s first colour TV broadcast

Mexican peso crisisAsian 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 marginaltax rate 82.4% to 59.5% 46.4% 46.4%50.3%

Wall Street Reform Act

Japan tsunami

iPhoneWinter Olympics

population (over 65) 14.8%population (over 65) 7.8%

population 34,670,352population 13,712,000

1st class stamp 63¢ +GST1st class stamp 4¢

life expectancy M: 78.8, F: 83.3life expectancy M: 66.5, F: 71.0

avg family income $91,000avg family income $38,059avg family income $12,716

min wage $10.25min wage $6.85min wage $2.90min 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 284509297

500850 1,011725713

gold's fixed price of $35 U.S. per oz abandoned 253482

1,895

Arab oil embargo

BP oil spill

77.72113.39

30.28

145.31

50.51

77.0537.2210.8240.65

10.40

31.7038.3414.23

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.

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