The year to October 31, 2000

Depending on the size and strategy of your portfolio, we may utilize mutual funds for some or all of the bond, Canadian equity and foreign equity components. In this issue, we review the performance of the particular funds that we support most popularly. The following performance figures are to Oct. 31, 2000. Bold emphasis indicates that the fund performed above average for its category during the particular 1, 3, 5 or 10 year periods.

Foreign Equity Mutual Funds

We use mutual funds to fill the international component of most portfolios. This is because the nature of international investing requires regional specialization of knowledge in the various geographic markets. In some situations, we do invest directly in equities and exchange indices on the New York and NASDAQ exchanges to fill all or part of the US component of your international allocation. The international funds are broad-based and invest around the world, weighting more in markets that have greater growth expectations.

Fund / Years YTD 1 3 5 10
International: %
AGF Int’l Value 24.4 35.0 21.8 22.2 18.2
BPI Global -7.5 13.4 21.8 20.6 15.6
CI Global -0.5 25.8 21.4 19.9 16.7
Fidelity Int’l Port. -3.7 8.2 14.4 16.8 14.9
Templeton Growth -3.0 7.8 6.5 11.4 15.3
Templeton Int’l -3.6 8.0 8.5 13.4 16.2
Trimark Fund 11.3 19.5 10.9 14.1 19.5
United States:
AGF Amer. Growth -4.1 6.1 24.3 25.0 21.3
Spec. Amer. Growth -6.6 35.6 30.0 28.0 26.1
Europe:
Dynamic Euro. -11.5 12.5 7.4 16.4 10.8
Fidelity Euro. -3.9 9.8 13.9 17.1

Other than Trimark and AGF International, these international mutual funds have declined in value year-to-date. This reflects a year-to-date decline in all world markets (in U.S. dollars), with the exception of Canada. The Morgan Stanley World Index, a benchmark index, has declined 10.8% (in Cdn. $) year-to-date. Taking a longer time perspective, all these funds have outperformed on average.

The United States Morgan Stanley Index has declined 13.8% (in Cdn. $) year-to-date and both AGF and Spectrum American Growth Funds have declined accordingly. Both funds have been above average performers for the longer term.

The Euro Morgan Stanley International Index has declined 16.0% (in Cdn. $) year-to-date and both Dynamic and Fidelity European Funds have declined. Fidelity European Fund has continued to outperform the average.

Canadian Equity Mutual Funds

We use Canadian equity mutual funds in portfolios that do not have sufficient dollar amounts required to achieve a diversified mix of direct Canadian share holdings. The stellar performance of the Canadian market in the last year will be difficult to duplicate.

Fund / Years YTD 1 3 5 10
Canadian: %
Bissett Canadian 22.8 35.4 9.2 20.0 16.7
Ivy Canadian 18.3 23.1 9.8 14.6
Spectrum Cdn. 17.1 32.0 11.0 16.7 15.6
TD Cdn. Value 10.0 22.4 3.0 15.9
Trimark Cdn. 14.1 15.7 7.3 11.9 13.4
Universal Future 9.0 31.2 18.1 19.1 16.1

The Bissett Canadian Fund is a perennial star. As it has a minimum $10,000 initial investment, we are precluded from holding it in some portfolios.

Ivy Canadian invests in larger capitalized Canadian companies. The Spectrum Canadian Fund, the Trimark Canadian Fund and the TD Canadian Value Fund look for investments with strong appreciation value that is not yet reflected in market value. The Spectrum Canadian Fund has consistently performed above-average.

Universal Future Fund seeks above-average, long-term returns by investing in technologically-intensive growth Canadian companies and has managed to achieve above-average returns over the last 10 years.

Canadian Bond Mutual Funds

Fund / Years YTD 1 3 5 10
Canadian: %
Altamira Income 5.9 5.7 3.5 6.1 10.0
TD Cdn. Bond 8.3 8.7 5.4 8.6 10.2
TD Cdn. Gov’t Bond Index 6.6 6.7 4.2 7.1 9.1

The Altamira Income Fund and the TD Canadian Government Bond Index Fund invest in government bonds and vary the maturity of bonds held depending on their outlook of the Canadian economy. The TD Canadian Bond Fund invests mostly in high-quality bonds issued by Canadian corporations, as well some government bonds. The TD funds have consistently performed above-average.