January 13, 2014

Strategy Review

North American Strategy 2013 Year End Review and Outlook January 2014

The fourth quarter ended with a strong finish for the U.S. markets, which resulted in the best annual performance for the S&P500 index since 1997. In the quarter, the S&P500 returned 10.5% in US$ or 14.3% in C$, which helped drive the total return for 2013 to 32.4 % in US$ or 41.5% in C$.Clearly,the weaker Canadian dollarrelative to the US dollar was a significant driver of the returns when viewed in Canadian dollars as the Canadian dollar declined approximately 7% during the year. As we discussed during our last client quarterly meeting and conference call in November, we began moving more assets into the U.S. in 2012 with the U.S. exposure in our North American Equity strategy increasing from approximately 25% to 43% by the end of the first quarter of 2013. We also removed our US dollar currency hedge in the fall of 2012, which had helped protect the portfolios from the prior decline in the US dollar relative to the Canadian dollar. Being unhedged during 2013 allowed our Canadian clients’ portfolios to benefit from the relative strength of the US dollar.