OUTLOOK 2006

Current Seas

We anticipate an exciting journey this year. Our strong crew has the equipment, knowledge and intuition to plot a course through coming inclement weather. We foresee having to tack! more often – tack! away from the C$, tack! toward China, tack! for the best wind in Japan, tack! currencies reveal new wind.

2005 - Spinnaker Up

2005 was a year with a prevailing tailwind. We are happy to report that our spinnaker caught plenty of wind - our sector and geographic picks worked out well. However, some bouts of billowing occurred at the hands of the odd Canadian dollar cross‐wind.

Global Re-balancing - Tack! Toward Easterlies

The economic winds are shifting from westerlies to easterlies, with China as the source. This is our long‐term course, and we see more consistent winds travelling in an easterly direction, revealing a stand‐alone Asian trading bloc much less reliant on the U.S. We stick to value on our 2006 tack which means new wind from Taiwan.

Cycles - Sailing 101 - Weather Maps

Check out the maps; we are due for some stormy weather. The U.S. continues in a secular bear market; secular bulls include emerging markets with commodities at a key inflexion point.

Developed Markets - Tack! For the Best Wind in Japan

As sailing 101 points out, we are firm believers that the U.S. market suggests inclement weather is coming. We view this as an opportunity to move ahead of the competition - that means continued focus in Japan and being opportunistic in the U.S., especially in healthcare.

Developed Markets - Tack! New Wind in Brazil and Taiwan

We believe emerging markets have tipped the scales in their favour. Rising employment, per‐capita GDP, foreign currency reserves, and falling foreign debt have pulled risk premiums down - this area of the world is race‐ready, having transformed competition with skilled skippers, an enthusiastic crew and strong financial backing.

Canada - Tack! Away from the C$

Having sailed with our spinnaker up the past three years, we foresee changing wind conditions for Canada. This is especially evident in the currency cross‐winds. We are set to tack in these conditions as the maps point to some choppy seas.

2006 - Tack! Currencies Reveal New Wind

We believe 2006 will be a year of opportunity following some challenging wind conditions. Our dividend sea anchor will see us through these conditions while asset allocation will position us to take advantage of the new wind.