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V3 Report Example Mar 2011

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Investment Report, enhanced version

Investment Report, enhanced version

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  • 1. . ly ce , on en upASSET ALLOCATION ANALYST er k ef oc rr M Report prepared for Albert A. Client and Louise Clientfo Prepared by Charles Q. Broker Phone: 123-456-7890 E-mail: charles.broker@email.com Date: 2011/02/28
  • 2. Charles Q. Broker . ly ce , on en up INTRODUCTION This report is based on the er k notion that most of a portfolio’s ef oc variability over the long term can be attributed to asset rr M allocation, not to stock picking. Based on your investor profile, we identify the optimal asset allocation that reflects your needs in terms of risk and return. So our aim here is to fo provide you with a solid foundation for your new investment portfolio.REPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 2
  • 3. . ly ce , on en up TABLE OF CONTENTS CURRENT SITUATION AND OBJECTIVES Objectives Summary and Current Portfolio 5 er k INVESTOR PROFILE Your profile: overall view 7 8 ef oc Results of your investor profile questionnaire PROPOSED ASSET MIX The efficient frontier 9 Current vs Proposed asset mix 10 rr M PROPOSED ASSET MIX STATISTICS A graphical view of asset mix performance 11 Calendar year overview 12 Rolling period returns 13 ....... PROPOSED PORTFOLIO ANALYTICS Your new portfolio: Overall view 14 Performance Analysis 15 Key Portfolio Risk Statistics 16 Performance compared to weighted market indexes 17 Positive-Negative Quarters 18 Risk statistics - Alpha, Beta and R-squared 19 Risk statistics - Tracking Error, Information & Treynor ratios 20 fo Historical growth 21 Return vs Risk with Portfolio Statistics 22 Holdings: Calendar year returns 23 Holdings: Return vs Risk Analysis 24 Holdings: Best/Worst Qtrs & Capture ratios 25 Correlation Matrix 26 ASSET FACT SHEETS 27REPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 3
  • 4. . ly ce , on en up TABLE OF CONTENTS DISCLOSURE 3. 0 ROLES AND RESPONSIBILITIES 32 er k ef oc rr M foREPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 4
  • 5. OBJECTIVES SUMMARYThis page presents a summary of your main financial objectives and how each objective relates to your global portfoliovalue. As each objective may have a different time horizon, we have outlined a timeline for when each objective requiresliquidity.ASSESSING YOUR FINANCIAL OBJECTIVESThis is: your current situation . ly ce , on en up er k ef oc rr M foREPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 5
  • 6. Current Situation and ObjectivesYOUR CURRENT PORTFOLIO: OVERALL VIEWOn this page you can see the overall allocation in your current portfolio and a detailed list of the investments.This is: your current portfolio . as of 2010/12/31 ly Asset Class Breakdown Region Breakdown ce , Cash 29.80 % on en up U.S. Equities 27.81 % Canada 43.93 % International Equities 18.54 % United States 30.7 % Canadian Bonds 15.56 % International 25.30 % International Bonds 4.97 % Not Available 0.01 % er k Canadian Equities 3.31 % Style Breakdown Market Capitalization Breakdown ef oc Other Equity 49.67 % Other 50.33 % Other 29.80 % Large Cap 49.67 % Fixed Income 20.53 % rr MCurrent InvestmentsAsset Code Asset Name Minimum Investment Currency Category Investment (CAD) WeightingCIG925 CI Global Segregated Fund $500.00 CAD Foreign Equities $70,000.00 46.36% Fidelity Canadian MoneyFID535 $500.00 CAD Cash $45,000.00 29.80% Market Fund Series A Northwest Specialty HighNWT802 $500.00 CAD Foreign Fixed Income $25,000.00 16.56% Yield Bond Fund Series A CI Signature Canadian BondCIG2303 $500.00 CAD Fixed Income $6,000.00 3.97% Corporate Class A C$ Research in MotionRIM N/A CAD Canadian Equities $5,000.00 3.31% Common shares $151,000.00 100.00% foReturns shown are represented in CAD termsREPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 . 6
  • 7. Investor ProfileYOUR PROFILE: OVERALL VIEWYour answers to specific financial and behavioural questions help guide you to your optimal asset mix and recommendedbenchmark portfolio.INVESTOR PROFILE QUESTIONNAIREYour Profile: Balanced .Time Horizon Risk Tolerance Current Income Financial Stability Level of Discretion Benchmark ly Conservative ce , on en up Conservative er k Conservative ef oc Conservative Time Horizon rr M Moderate Risk Balanced Tolerance Level of Discretion Financial Stability Current Positive Income Aggressive foThe Investor Profile Questionnaire addresses the basic issues at the heart of any sound personal investment strategy: theprojected time horizon for the particular investment; the tolerance for short-term losses, or downside risk; and the nature ofthe returns required. The answers to these questions lead to a proposed strategic benchmark that fits an investorsfinancial needs, providing a suitable balance between return and risk.REPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 7
  • 8. Investor ProfileRESULTS OF YOUR INVESTOR PROFILE QUESTIONNAIREYour answers to specific financial and behavioural questions help guide you to your optimal asset mix and recommendedbenchmark portfolio.INVESTOR PROFILE QUESTIONNAIRE - CONTINUEDYour Profile: Balanced .You are an investor that prefers balance through diversification of asset classes. You want a balance between lycapital preservation and capital growth. Your investor profile is located between that of an aggressive andconservative investor. Your time horizon is medium to long term. ce , on en upTIME HORIZONI may need the total amount invested and the investment revenue from this account within the next five years.YOU ANSWERED NORISK TOLERANCE er kIf the return from this account was negative over a year, thus generating paper financial losses in the shortrun, I would continue to uphold my initial investment strategy. ef ocYOU ANSWERED YESCURRENT INCOME rr MI will cover my current expenses without using this account.YOU ANSWERED NOFINANCIAL STABILITYMy personal and financial situation allows me to incur the risk of short-term losses without compromising myfinancial stability.YOU ANSWERED NOLEVEL OF DISCRETIONIn relative terms, the value of this account represents less than 25% of my net assets.YOU ANSWERED YES foThe Investor Profile Questionnaire addresses the basic issues at the heart of any sound personal investment strategy: theprojected time horizon for the particular investment; the tolerance for short-term losses, or downside risk; and the nature ofthe returns required. The answers to these questions lead to a proposed strategic benchmark that fits your financial needs,providing a suitable balance between return and risk.REPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 8
  • 9. Proposed Asset MixTHE EFFICIENT FRONTIERAsset allocation is based on the notion that for each investor profile there is an optimal allocation of the invested capitalthat maximizes return expectations consistent with acceptable risk. This is called the efficient frontier.EFFICIENT FRONTIER . ly ce , on en up 11 International Equities Alternatives 10 U.S. Equities er k Aggressive Canadian Equities ef oc 9 Positive Balanced rr M Expected Return (%) 8 Moderate 7 Conservative International Bonds Canadian Bonds This is your 6 proposed asset mix fo 5 Cash This is where you currently stand 4 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Expected Risk - Standard Deviation (%)A benchmark asset mix reflects long-term strategic objectives, regardless of the short-term market outlook. Portfolios thatare not found on the efficient frontier may be re-allocated to achieve a higher expected return for a given level of risk.REPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 9
  • 10. Proposed Asset MixCURRENT VS PROPOSED ASSET MIXThis page compares your current asset mix with that of your proposed mix and highlights the changes required to makeyour portfolio allocation more consistent with your investor profile.REALIGNING YOUR PORTFOLIOThis is: your proposed asset allocation . ly Classes Current Asset Allocation Proposed Asset Allocation Deviation ce , on en up Equities Canadian Equities 1.70% 20.00% 18.30% U.S. Equities. 29.80% . 15.00% -14.80% International Equities 19.90 % 15.00% -4.90% Bonds 15.00% er k International Bonds 5.00% 20.00% Canadian Bonds 13.90% 30.00% 16.10% Cash ef oc Cash 29.80% 0.00% 29.80% Alternatives Alternatives rr M foThis section translates your objectives into specific allocations of stocks, bonds and cash, in Canadian and global markets.The last column on the right denotes the deviation from your current portfolio asset mix.REPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 10
  • 11. Proposed Asset Mix StatisticsA GRAPHICAL VIEW OF ASSET MIX PERFORMANCEHere we are comparing the historical performance of portfolios with the same asset mix as your current and proposedportfolios. As you can see, based on historical data, the changes we are proposing could have a significant impact on yourperformance outlook.HISTORICAL PERFORMANCE - ASSET MIXThis is: a historical simulation . ly 2002/11/01 to 2010/12/31 $240,000 2 ce , on en up er k$220,000 ef oc $200,000 1 rr M $180,000 $160,000 $140,000 4Q 02 1Q 03 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 1Q 06 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 fo Assumptions Actual results Initial investment NaN Estimated end date Annual compound Monthly cashflow portfolio value return Current asset mix $196,550.87 2.75% Proposed asset mix $238,183.13 4.56%This page is designed to graphically present a variety of simulations which may include the historical performance of thecurrent and proposed asset mixes and related combinations of market indexes. A broad market index is used to representeach asset class.REPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 . 11
  • 12. Proposed Asset Mix StatisticsCALENDAR YEAR OVERVIEWThis chart shows how the asset mix of your current and proposed portfolios would have performed during the last 20calendar years, giving an indication of the volatility of the portfolios.HISTORICAL CALENDAR RETURNThis is: your proposed asset mix . ly Proposed Asset Mix Current Asset Mix 46 % ce , Dot COM bubble World Recession on en up 33 % 80% of 19 % calendar years were positive er k 5% ef oc -9 % 20% of calendar years were -23 % negative rr M 46 % 33 % 75.00% of 19 % calendar years were positive 5% -9 % fo 25.00% of calendar years were -23 % negative 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010REPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 12
  • 13. Proposed Asset Mix StatisticsROLLING PERIOD RETURNSThis chart displays the best and worst 1-year, 3-year and 5-year rolling period returns based on the asset mix of yourcurrent and proposed portfolios. This can give an indication of the behaviour of the returns through time.MAGNITUDE OF POSITIVE AND NEGATIVE RETURNSThis is: your proposed asset mix . ly 106.88 110 % ce , on en up 88 % 66 % 58.87 42.60 44.48 44 % 38.05 er k 27.72 27.80 24.32 24.98 22 % ef oc 0% rr M 0.93 1% -3.89 -1.09 -6.51 -6.56 -21 % -20.55 -20.56 -19.46 -43 % -38.30 -65 % 1-Year Returns 3-Year Returns 5-Year Returns fo -87 % (Rolling period) (Rolling period) (Rolling period) -109 % Current Proposed IndexThis simulated historical return chart is used to provide a measure of the magnitude of risk and return based on rollingyearly returns of the proposed portfolio asset mix. Particularly useful are the “worst” and “best” performances the upperand lower chart respectively which were the lowest and highest values attained by the portfolio. A broad market index mayalso be displayed for comparison purposes.REPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 13
  • 14. Proposed Portfolio AnalyticsYOUR NEW PORTFOLIO: OVERALL VIEWOn this page you can see which assets we selected to build your new portfolio and how they combine to offer you a moreefficient asset allocation.A PORTFOLIO BUILT USING A MORE EFFICIENT ASSET ALLOCATIONThis is: your proposed portfolio . as of 2010/12/31 ly Asset Class Breakdown Region Breakdown ce , on Canadian Bonds . 3% en up Canada 43.54 % Canadian Equities . % International 36.14 % International Equities % United States 20.32 % U.S. Equities % Not Available 0.00 % International Bonds % er k Style Breakdown Market Capitalization Breakdown ef oc Fixed Income 50.33 % Other 50.33 % Other Equity 49.67 % Large Cap 49.67 % rr MProposed InvestmentsAsset Code Asset Name Minimum Investment Currency Category Investment (CAD) WeightingAIS502 Altamira Long Term Bond Fund $1,000.00 CAD Fixed Income $45,000.00 29.80% Royal Bank of CanadaRY N/A Canadian Equities $30,000.00 19.87% common sharesCIG14005 CI Global Bond Fund Class A C$ $500.00 CAD Foreign Fixed Income $30,000.00 19.87%AGF201 AGF American Growth Class C$ $500.00 CAD U.S Equities $22,500.00 14.90% CI International Fund Class ACIG874 $500.00 Foreign Equities $22,500.00 14.90% C$ CI Signature Canadian BondCIG2303 $500.00 CAD Fixed Income $1,000.00 0.66% Corporate Class A C$ $151,000.00 100.00% foOnce the asset mix is agreed upon, a new custom portfolio is built using individually selected securities. These assets aredisplayed in the lower Selection of funds section and are in order of their portfolio weighting . In the analysis section onthe upper part of the page, pie charts display the various statistical components of this new portfolio as a whole. Theseinclude a breakdown by asset class, by geographic region, by style (management style), and by market capitalizationwhich is a measure of the value of a public company or the underlying public companies of a fund.REPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 14
  • 15. Proposed Portfolio AnalyticsPERFORMANCE ANALYSISThis page presents both calendar year and trailing year returns for the current / proposed portfolio and a blendedbenchmark, giving additional insight into the volatility of the portfolio in relation to the blended benchmark.CALENDAR - TRAILING YEAR COMPARISONThis is: your proposed portfolio .Calendar Year Returns 2002/11/01 to 2010/12/31 ly 20.00 % ce , 10.00 % on en up Time Current Portfolio Proposed Portfolio Blended Benchmark 0.00 % frame Return 2010 5.02 % 8.36 % 9.02 % -10.00 % 2009 13.84 % 8.25 % 9.26 % 2008 -22.26 % -12.18 % -8.62 % -20.00 % 2007 -5.23 % -1.04 % -0.05 % 2006 9.94 % 9.70 % 12.35 % er k -30.00 % 2010 2009 2008 2007 2006 ef oc YearsTrailing Year Returns 2002/11/01 to 2010/12/31 10.00 % rr M 8.00 % 6.00 % Time Current Portfolio Proposed Portfolio Blended Benchmark frame Return 4.00 % MRQ 3.06 % 1.77 % 1.74 % 1 yr 5.02 % 8.36 % 9.02 % 2.00 % 3 yr -2.41 % 0.99 % 2.87 % 0.00 % 5 yr -0.64 % 2.26 % 4.10 % -2.00 % 7 yr 1.01 % 3.78 % 5.35 % 10 yr N/A N/A N/A -4.00 % MRQ 1 3 5 7 YearsPrevious 5 year returns Proposed Blended BenchmarkYear 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. YTD 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. YTD fo2010 0.47 % 0.21 % 3.72 % 1.77 % 8.36 % 0.23 % 0.25 % 2.70 % 1.74 % 9.02 %2009 N/A 3.90 % 2.51 % -0.27 % 8.25 % N/A 4.32 % 1.97 % -0.77 % 9.26 %2008 N/A N/A N/A N/A -12.18 % N/A N/A N/A N/A -8.62 %2007 N/A N/A N/A N/A -1.04 % N/A N/A N/A N/A -0.05 %This page presents statistics on the returns of the current / proposed portfolio assets, compared to those of a blendedbenchmark, which is comprised of indexes representing each specific asset in the same proportion as the proposedportfolio.The calendar year total returns are the annual returns for January to December periods. The Trailing returns arecalculations over a specified time period, typically longer than 1 year, that are annualized from the current date. Both setsof returns are displayed next to blended benchmark portfolio statistics, indicating the level of performance of theinvestment in relation to similar investments. While trailing time period returns are important to know, due to the averagingor annualizing, these returns can disguise just how volatile an asset class or mutual fund investment can be, despite whatare seemingly attractive and consistent investment returns. An investor should also be aware of the investments rollingtime period returns. Overall, this provides the investor with some idea of the how well the investment is performing incomparison to similar investment opportunities.REPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 15
  • 16. Proposed Portfolio AnalyticsKEY PORTFOLIO RISK STATISTICSThis chart displays the rolling period returns, standard deviations and Sharpe ratios for the current / proposed portfoliocompared to a blended benchmark. These measures can give you an indication of the behaviour of the return of theportfolio, and how likely it is to experience movements through time, relative to the markets.RISK-RETURN COMPARISONThis is: your proposed portfolio . lyReturns 2002/11/01 to 2010/12/31 10.00 % ce , 8.00 % on Time Current Portfolio Proposed Portfolio Blended Benchmark en up 6.00 % frame Return 4.00 % 1 yr 5.02 % 8.36 % 9.02 % 2.00 % 3 yr -2.41 % 0.99 % 2.87 % 0.00 % 5 yr -0.64 % 2.26 % 4.10 % -2.00 % 7 yr 1.01 % 3.78 % 5.35 % -4.00 % 10 yr N/A N/A N/A 1 3 5 7 er k YearsStandard Deviation 2002/11/01 to 2010/12/31 ef oc 12.00 % Standard Deviation 10.00 % Time Current Portfolio Proposed Portfolio Blended Benchmark 8.00 % frame 6.00 % 1 yr 7.77 % 5.51 % 4.96 % rr M 3 yr 10.54 % 9.02 % 8.80 % 4.00 % 5 yr 8.68 % 7.63 % 7.38 % 2.00 % 7 yr 7.79 % 7.01 % 6.74 % 0.00 % 10 yr N/A N/A N/A 1 3 5 7 YearsSharpe Ratio 2002/11/01 to 2010/12/31 2.00 1.50 Time Current Portfolio Proposed Portfolio Blended Benchmark frame Sharpe 1.00 1 yr 0.57 1.41 1.70 0.50 3 yr -0.33 -0.01 0.21 0.00 5 yr -0.33 0.00 0.25 7 yr -0.17 0.21 0.45 -0.50 fo 10 yr N/A N/A N/A 1 3 5 7 YearsThis page presents the returns, the standard deviation and the Sharpe ratio of the portfolio(s) compared to the blendedbenchmark, which is comprised of indexes representing each sprecific asset in the same proportion as the proposedportfolio, over various time periods.Standard deviation is a statistical measurement of historical volatility; the greater the number, the more volatile the asset.Sharpe ratio characterizes how well the return of the portfolio compensates the investor for each unit of absolute risk theyassume, as measured by the standard deviation of the portfolio. The greater a portfolios Sharpe ratio, the better its risk-adjusted performance has been.REPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 16
  • 17. Proposed Portfolio AnalyticsPERFORMANCE COMPARED TO WEIGHTED MARKET INDEXESThis chart gives an indication of the portfolios overall performance behaviour in up and down markets compared to that ofblended benchmark of broad market indexes.OVER/UNDER BENCHMARK COMPARISONThis is: your proposed portfolio .Up-Market Capture Ratio 2002/11/01 to 2010/12/31 ly 1.20 1.00 ce , 0.80 Time frame Current Portfolio Proposed Portfolio on Ratio en up 0.60 1 yr 119.51 98.28 3 yr 109.72 85.07 0.40 5 yr 98.98 85.85 0.20 7 yr 97.08 86.64 0.00 10 yr N/A N/A 1 3 5 7 Years er kDown-Market Capture Ratio 2002/11/01 to 2010/12/31 ef oc 1.40 1.20 1.00 Time frame Current Portfolio Proposed Portfolio Ratio 0.80 1 yr 118.82 97.94 0.60 3 yr 120.86 102.41 rr M 0.40 5 yr 119.81 104.21 0.20 7 yr 115.37 105.93 0.00 10 yr N/A N/A 1 3 5 7 YearsReturns Above Blended Benchmark 2002/11/01 to 2010/12/31 0.50 % 0.00 % Time frame Current Portfolio Proposed Portfolio -0.50 % Return 1 yr 0.17 % -0.66 % -1.00 % 3 yr -1.92 % -1.87 % -1.50 % 5 yr -2.42 % -1.83 % -2.00 % 7 yr -1.79 % -1.57 % -2.50 % 10 yr N/A N/A 1 3 5 7 fo YearsThe up-market capture ratio is used to evaluate how well a portfolio performed relative to an index during periods whenthat index has risen. The ratio is calculated by dividing the portfolios returns by the returns of the index during the up-market, and multiplying that factor by 100. Any result above 100 means the portfolio has outperformed the index during theup-market by that amount.In down markets, a down-market capture ratio of less than 100 indicates that the porfolio declined only that percent asmuch as the index. The returns above blended benchmark statistics displays how much the portfolio has outperformed orunderperformed the performance of the blended benchmark, which is comprised of indices representing each specificasset class in the same proportion as the proposed portfolio.REPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 17
  • 18. Proposed Portfolio AnalyticsPOSITIVE-NEGATIVE QUARTERSHere you can see the positive and negative performance trends of the proposed portfolio compared to the sameinvestment in relative market indices over specific time periods.QUARTERLY RETURNS COMPARISONThis is: your proposed portfolio .Positive Quarters 2002/11/01 to 2010/12/31 ly 53 ce , 42 on Time en up Current Portfolio Proposed Portfolio Blended Benchmark frame Quarters 32 1 yr 6 8 9 21 3 yr 21 19 23 5 yr 33 32 37 11 7 yr 47 47 53 10 yr N/A N/A N/A 0 er k 1 3 5 7 Years ef ocNegative Quarters 2002/11/01 to 2010/12/31 37 30 Time rr M Current Portfolio Proposed Portfolio Blended Benchmark frame Quarters 22 1 yr 6 4 3 15 3 yr 15 17 13 5 yr 27 28 23 7 7 yr 37 37 31 10 yr N/A N/A N/A 0 1 3 5 7 YearsReturns 2002/11/01 to 2010/12/31 10.00 % 8.00 % 6.00 % Time Current Portfolio Proposed Portfolio Blended Benchmark frame Return 4.00 % fo 1 yr 5.02 % 8.36 % 9.02 % 2.00 % 3 yr -2.41 % 0.99 % 2.87 % 0.00 % 5 yr -0.64 % 2.26 % 4.10 % -2.00 % 7 yr 1.01 % 3.78 % 5.35 % 10 yr N/A N/A N/A -4.00 % 1 3 5 7 YearsThis chart displays positive and negative return trends for the proposed portfolio compared to those of the equivalentmarket indices, using a blended benchmark which is comprised of indexes representing each specific asset class in thesame proportion as the proposed portfolio periods. The last graph displays the returns of the proposed portfolio comparedto the blended benchmark.REPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 18
  • 19. Proposed Portfolio AnalyticsRISK STATISTICS - ALPHA, BETA AND R-SQUAREDThese risk statistic summary pages help to evaluate the overall performance and risk level of the proposed portfolio incontext with the markets.ADDITIONAL RISK - RETURN STATISTICSThis is: your proposed portfolio .Alpha 2002/11/01 to 2010/12/31 ly -0.50 % ce , -1.00 % Time frame Current Portfolio Proposed Portfolio on en up Alpha 1 yr -0.90 % -0.79 % -1.50 % 3 yr -1.66 % -1.84 % -2.00 % 5 yr -2.35 % -1.82 % 7 yr -1.85 % -1.57 % -2.50 % 10 yr N/A N/A 1 3 5 7 Years er kBeta 2002/11/01 to 2010/12/31 ef oc 1.40 1.20 1.00 Time frame Current Portfolio Proposed Portfolio 0.80 1 yr 1.25 1.02 Beta 0.60 3 yr 1.17 0.98 rr M 0.40 5 yr 1.14 0.99 0.20 7 yr 1.12 1.00 0.00 10 yr N/A N/A 1 3 5 7 YearsR-Squared 2002/11/01 to 2010/12/31 100.00 % 80.00 % Time frame Current Portfolio Proposed Portfolio R-Squared 60.00 % 1 yr 94.17 % 83.69 % 40.00 % 3 yr 85.27 % 91.97 % 5 yr 85.18 % 92.03 % 20.00 % 7 yr 84.69 % 92.50 % 0.00 % 10 yr N/A N/A 1 3 5 7 fo YearsThe Alpha is the rate of return on a portfolio that is in excess of that of the risk-matched blended benchmark portfolio. Itrepresents the added value of the portfolio. A positive Alpha of 1.0 means the portfolio has outperformed the benchmark by1%.The Beta is a measure of the volatility of a portfolio in comparison to the market as a whole. It indicates the portfoliossensititviy to swings in the market. A beta of 1 indicates the portfolios price will move with the market; less than 1 indicatesless volatility and greater than 1 indicates more volatilty, relative to the market.The R-Squared indicates the percentage of a portfolios movements that can be explained by movements in a benchmarkmarket index. A high R-squared (between 85 and 100) indicates the funds performance patterns have been in line with theindex.REPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 19
  • 20. Proposed Portfolio AnalyticsRISK STATISTICS - TRACKING ERROR, INFORMATION & TREYNOR RATIOSThese risk statistic summary pages help to evaluate the overall performance and risk level of the proposed portfolio incontext with the markets.ADDITIONAL RISK - RETURN STATISTICSThis is: your proposed portfolio .Tracking Error 2002/11/01 to 2010/12/31 ly 0.05 0.04 Tracking Error ce , Time frame Current Portfolio Proposed Portfolio on en up 0.03 1 yr 2.41 2.23 0.02 3 yr 4.28 2.56 5 yr 3.48 2.15 0.01 7 yr 3.15 1.92 0.00 10 yr N/A N/A 1 3 5 7 Years er kInformation Ratio 2002/11/01 to 2010/12/31 ef oc 0.20 Information Ratio 0.00 Time frame Current Portfolio Proposed Portfolio -0.20 1 yr 0.07 -0.30 -0.40 3 yr -0.45 -0.73 -0.60 rr M 5 yr -0.69 -0.85 -0.80 7 yr -0.57 -0.82 -1.00 10 yr N/A N/A 1 3 5 7 YearsTreynor Ratio 2002/11/01 to 2010/12/31 0.08 0.06 Treynor Ratio Time frame Current Portfolio Proposed Portfolio 0.04 1 yr 0.04 0.08 0.02 3 yr -0.03 0.00 0.00 5 yr -0.03 0.00 -0.02 7 yr -0.01 0.01 -0.04 10 yr N/A N/A 1 3 5 7 fo YearsThe Tracking Error represents a fund managers added value variability. It reports the difference between the returnreceived and that of the benchmark being compared to. It is reported as a standard deviation percentage difference.The Information Ratio is the ratio of the portfolio returns above the returns of the blended benchmark to the volatility ofthose returns. Its designed to measure the ability to generate excess returns relative to a benchmark on a risk-adjustedbasis. The higher the IR the more consistent the manager is.The Treynor ratio characterizes how well the return of the portfolio compensates the investor for each percentage ofrelative risk they assume, as measured by the beta of the portfolio.REPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 20
  • 21. Proposed Portfolio AnalyticsHISTORICAL PERFORMANCEThis page allows you to track the historical growth of the proposed portfolio relative to its blended benchmark. You can alsocompare the periodic values of the proposed portfolio to those of its blended benchmark.HISTORICAL PORTFOLIO PERFORMANCEThis is: your proposed portfolio . 11/01/2002 to 10/30/2010 ly $18,000 ce , on en up 3 $16,000 2 $14,000 er k 1 $12,000 ef oc $10,000 rr M $8,000 4Q 02 1Q 03 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 1Q 06 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10 Initial Portfolio Value Estimated End Date Portfolio Value 1. Current $10,000 $12,107 2. Proposed $10,000 $14,224 3. Blended Benchmark $10,000 $16,164 foReturns shown are represented in CAD termsThese statistics display the simulated performance of an investment in both the proposed portfolio and its relative blendedbenchmark, which is comprised of market indexes representing each specific asset in the same proportion as the proposedportfolio. They are designed to provide insight into the periodic return behaviour and the resulting end value of theproposed portfolio assets relative to the blended benchmark indexes, over a specified period.REPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 21
  • 22. Proposed Portfolio AnalyticsRISK VS RETURNThis page provides a statistical overview of your current portfolio, proposed portfolio and the blended benchmark from a riskvs return perspective.HISTORICAL PORTFOLIO PERFORMANCEThis is: your proposed portfolio 2002/11/01 to 2010/12/31 . 2 ly 9 7 Historical Nominal Return (%) ce , on 7 en up 3 5 8 10 3 9 4 er k 5 6 1 1 ef oc 0 2 4 6 8 10 12 14 16 Risk - Standard Deviation (%) Name Risk(%) Return(%) Name Risk(%) Return(%) Current Portfolio 7.91 2.51 CI Global Bond Fund rr M 5 9.66 0.56 Proposed Portfolio 7.03 4.33 Class Blended Benchmark 6.76 5.89 6 CI Global Segregated 13.65 0.55 AGF American Growth Northwest Specialty 1 14.12 0.2 7 8.66 7.98 Class High Royal Bank of Canada Equitable Life Asset 2 12.01 9.67 8 7.22 4.08 shares Allocation 3 Altamira Long Term 6.54 5.44 Fidelity Canadian 9 0.35 1.86 CI International Fund Money Market 4 15.26 1.91 Class CI Signature Canadian 10 3.27 3.81 BondStatistical Overview 2002/11/01 to 2010/12/31 Proposed Blended Benchmark Total Cumulative Return (7yr) 29.64 % 44.00 % Sharpe (7yr) 0.21 0.45 fo Std Dev (7yr) 7.01 % 6.74 % Alpha (7yr) -1.57 % 0.00 % Beta (7yr) 1.00 1.00 Up Market Capture (7yr) 86.64 100.00 Down Market Capture (7yr) 105.93 100.00 Return (1yr) 8.36 % 9.02 % Return (3yr) 0.99 % 2.87 % Return (5yr) 2.26 % 4.10 %REPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 22
  • 23. Proposed Portfolio AnalyticsHOLDINGS: CALENDAR YEAR RETURNSThe calendar year return statistics on this page depict the recent calendar year returns of the assets in your proposedportfolio.CALENDAR YEAR RETURNSThis is: your proposed portfolio . as of 2010/12/31 lySelection of assetsAsset Name MRQ YTD 2010 2009 2008 2007 2006 ce ,Canadian Equities on en upRoyal Bank of Canada 4.55% 10.50% 10.50% 20.11% -27.62% 2.43% 17.92%Common shares S&P/TSX Composite Index TR 4.09% 17.61% 17.61% 35.05% -33.00% 9.83% 17.26%Fixed IncomeAltamira Long Term Bond Fund 0.01% 10.30% 10.30% 4.87% 0.57% 1.63% 2.32% er k Merrill Lynch 10+ Year Canada Broad 0.15% 12.46% 12.46% 4.45% 3.33% 3.63% 4.17% ef oc Market TRCI Signature Canadian Bond Corporate -0.07% 5.78% 5.78% 3.76% 4.42% 1.96% 2.53%Class A C$ 0.12% 6.91% 6.91% 5.08% 6.23% 3.62% 4.07% rr MForeign EquitiesCI International Fund Class A C$ 6.11% 4.15% 4.15% 14.39% -38.57% -8.32% 19.85% MS EAFE Free Index (C$) 4.99% 2.54% 2.54% 14.53% -30.48% -4.56% 27.12%U.S EquitiesAGF American Growth Class C$ 1.05% 14.18% 14.18% 16.04% -34.87% 2.38% 11.29% S&P 500 Total Return Index C$ 3.61% 9.04% 9.04% 9.34% -23.08% -9.80% 16.03% foThese statistics display the positive or negative returns realized by the assets of the proposed portfolio at the end of aspecified calendar year. They are designed to provide insight into the proposed portfolios performance relative to itsbenchmark index over each specified period. These statistics are displayed on both a portfolio and individual asset level.REPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 23
  • 24. Proposed Portfolio AnalyticsHOLDINGS: RISK VS RETURN ANALYSISThis table displays the historical return, standard deviation and Sharpe ratios for assets in the proprosed portfolio.ROLLING PERIOD RISK - RETURNThis is: your proposed portfolio . ly as of 2010/12/31Selection of assets ce , on en up MRQ 1 Year 3 Year 5 Year 7 YearAsset Name Return Return Return Sharpe Std Dev Return Sharpe Std Dev Return Sharpe Std DevCanadian EquitiesRoyal Bank of CanadaI 4.55% 10.50% -1.33% -0.16 14.71% 3.02% 0.06 12.93% 8.48% 0.50 12.32%common sharesA S&P/TSX Composite Index TR 4.09% 17.61% 2.09% 0.05 20.23% 6.51% 0.25 16.87% 9.99% 0.50 15.26% er kFixed Income ef ocAltamira Long Term Bond Fund 0.01% 10.30% 5.17% 0.56 7.37% 3.88% 0.24 6.68% 5.40% 0.50 6.18% Merrill Lynch 10+ Year Canada Broad 0.15% 12.46% 6.67% 0.72 7.81% 5.55% 0.47 7.03% 7.35% 0.77 6.49% Market TR rr MCI Signature Canadian Bond Corporate -0.07% 5.78% 4.65% 1.02 3.54% 3.68% 0.44 3.26% 3.88% 0.50 3.10%Class A C$ 0.12% 6.91% 6.07% 1.23 4.07% 5.18% 0.78 3.74% 5.72% 0.96 3.54%Foreign EquitiesCI International Fund Class A C$ 6.11% 4.15% -9.89% -0.57 19.11% -4.27% -0.40 16.18% -0.80% -0.21 14.66% MS EAFE Free Index (C$) 4.99% 2.54% -6.54% -0.41 18.30% -0.19% -0.16 15.46% 2.91% 0.04 13.90%U.S EquitiesAGF American Growth Class C$ 1.05% 14.18% -4.79% -0.32 18.05% -0.34% -0.17 15.25% -0.01% -0.17 14.04% S&P 500 Total Return Index C$ 3.61% 9.04% -2.85% -0.25 15.28% -0.82% -0.24 13.02% 0.02% -0.19 12.03% foForeign Fixed IncomeCI Global Bond Fund Class A C$ -0.99% 0.77% 7.46% 0.51 12.49% 3.86% 0.15 10.97% 1.22% -0.11 10.13% Citigroup World Government Bond Index -1.98% -1.15% 5.93% 0.34 14.37% 3.66% 0.11 12.79% 1.42% -0.08 11.57% CADProposed Portfolio 1.77% 8.36% 0.99% -0.01 9.02% 2.26% 0.00 7.63% 3.78% 0.21 7.01%Blended Benchmark 1.74% 9.02% 2.87% 0.21 8.80% 4.10% 0.25 7.38% 5.35% 0.45 6.74%This historical return table is used to provide a measure of the magnitude of risk and return of the assets in the proposedportfolio. The rolling yearly returns are useful for examining the behavior of returns over various periods, the standarddeviation measures historical volatility and the Sharpe ratio is used to characterize how well the return of the portfoliocompensates the investor for each unit of absolute risk they assume, as measured by the standard deviation of the asset .The greater an assets Sharpe ratio, the better its risk-adjusted performance has been.REPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 24
  • 25. Proposed Portfolio AnalyticsHOLDINGS: BEST/WORST QTRS & CAPTURE RATIOSThis is: your proposed portfolioBest/ Worst Performance as of 2010/12/31 BEST QUARTER WORST QUARTER WORST 4 QUARTERS CYCLE ANALYSIS MKT. CAP RATIOSINVESTMENT NAME ROR QTR ROR QTR ROR QTRS UP DOWN . lyCanadian EquitiesRoyal Bank of Canada common shares 6.58 Jan 2006 -11.49 Sep 2008 -30.53 Mar 2008- Feb 2009 61.52 88.20 ce , S&P/TSX Composite Index TR 11.46 May 2009 -16.67 Oct 2008 -38.20 Mar 2008- Feb 2009 N/A N/A onFixed Income en upAltamira Long Term Bond Fund 5.55 May 2003 -4.82 Oct 2008 -5.52 Nov 2007- Oct 2008 83.22 106.30 Merrill Lynch 10+ Year Canada Broad Market TR 5.72 Dec 2008 -6.44 Oct 2008 -2.94 Nov 2007- Oct 2008 N/A N/ACI Signature Canadian Bond Corporate Class A C$ 2.55 May 2003 -1.68 Jan 2009 -1.32 Jul 2005- Jun 2006 70.22 96.88 3.32 May 2003 -2.38 Oct 2008 -0.36 Jul 2005- Jun 2006 N/A N/AForeign EquitiesCI International Fund Class A C$ 9.20 Apr 2003 -17.62 Sep 2008 -42.09 Dec 2007- Nov 2008 86.47 102.64 er k MS EAFE Free Index (C$) 7.60 Dec 2003 -14.37 Sep 2008 -35.26 Mar 2008- Feb 2009 N/A N/AU.S Equities ef ocAGF American Growth Class C$ 8.71 Mar 2009 -13.74 Sep 2008 -35.04 Dec 2007- Nov 2008 99.85 102.11 S&P 500 Total Return Index C$ 7.71 Mar 2009 -8.85 Sep 2008 -26.76 Mar 2008- Feb 2009 N/A N/AForeign Fixed IncomeCI Global Bond Fund Class A C$ 10.00 Oct 2008 -4.71 Apr 2009 -14.07 May 2005- Apr 2006 71.32 88.62 Citigroup World Government Bond Index CAD 11.59 Oct 2008 -5.65 Jul 2009 -14.68 May 2005- Apr 2006 N/A N/A rr MProposed 3.92 Nov 2006 -8.76 Sep 2008 -15.65 Dec 2007- Nov 2008 86.96 106.51Blended Benchmark 4.45 Mar 2009 -7.06 Sep 2008 -13.78 Mar 2008- Feb 2009 N/A N/A foThis chart displays the historical best and worst quarterly rate of return figures for the assets in the proprosed portfolio.This gives an alternate view of the behaviour of the returns of these assets compared to their benchmarks. You can alsoassess an investment managers overall performance in up and down markets with the help of the market capture ratios.For a comprehensive performance analysis the system displays statistics on both the portfolio and holding level.REPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 25
  • 26. Proposed Portfolio AnalyticsCORRELATION MATRIXCorrection is a statistical measure of how assets move in relation to each other. A diversified portfolio of assets with lowcorrelations can smooth out portfolio returns and can protect a portfolio from large losses.This is: your proposed portfolio 2002/11/01 to 2010/12/31 . ly 1 2 3 4 5 6 ce , 1 AGF American Growth Class C$ 1.00 0.02 -0.10 0.72 -0.07 0.63 on en up 2 Altamira Long Term Bond Fund 1.00 0.36 0.22 0.94 0.23 3 CI Global Bond Fund Class A C$ 1.00 -0.03 0.48 -0.22 4 CI International Fund Class A 1.00 0.14 0.81 C$ er k 5 CI Signature Canadian Bond 1.00 0.11 Corporate Class A C$ ef oc 6 Royal Bank of Canada 1.00 Common shares rr M foThis page displays the correlation of the assets in your proposed portfolio This statistical measure shows how any twosecurities move in relation to each other, represented by values between -1 (opposite behaviour) and 1 (same behaviour).REPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 26
  • 27. Asset fact sheetAGF American Growth Class C$ (CAD) ASSET CODE(S): AGF201, AGF931, AGF275Asset category: U.S EquitiesBenchmark: S&P 500 Total Return Index C$ Minimum investment $500.00RETURN ANALYSISAnnualized Performance/ Calendar Year(%) . Annualized Performance % Calendar year performance % ly MRQ YTD 1 yr 3 yr 5 yr 7 yr 2010 2009 2008 2007 2006 AGF American Growth Class 1.05 14.18 14.18 -4.79 -0.34 -0.01 14.18 16.04 -34.87 2.38 11.29 ce , C$ on en up S&P 500 Total Return Index C$ 3.61 9.04 9.04 -2.85 -0.82 0.02 9.04 9.34 -23.08 -9.80 16.03 * N/A N/A N/A N/A * N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A * N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A * N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A * N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A er k (*) U.S Equities ef ocStandard Deviation 1973/02/01 to 2010/12/31 Best/ Worst Performance as of 2010/12/31 Time period return Worst(%) Best(%) Standard Deviation 20.00 % 3 month(s) Time Asset Bmark frame Asset -28.70(Sep/08 Nov/08) 28.42(Sep/80 Nov/80) rr M Standard Deviation 15.00 % 1 yr 14.01 % 10.86 % Blended -30.19(Sep/87 Nov/87) 23.64(Aug/82 Oct/82) Benchmark 10.00 % 3 yr 18.05 % 15.28 % 1 year(s) 5 yr 15.25 % 13.02 % 5.00 % 7 yr 14.04 % 12.03 % Asset -43.24(Oct/73 Sep/74) 63.96(Aug/82 Jul/83) 0.00 % 10 yr 16.56 % 13.31 % Blended -30.08(Apr/02 Mar/03) 56.52(Aug/82 Jul/83) 1 3 5 7 10 Benchmark Years 3 year(s) Asset -59.41(Apr/00 Mar/03) 165.25(Feb/96 Jan/99) Blended -39.62(Apr/00 Mar/03) 142.66(May/95 Apr/98) Benchmark foPast Performance does not guarantee future results and current performance may be lower or higher than past performance data.REPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 27
  • 28. Asset fact sheetAGF American Growth Class C$ (CAD) ASSET CODE(S): AGF201, AGF931, AGF275PERFORMANCE STATISTICSStatistical Overview 1973/02/01 to 2010/12/31 Time frame Sharpe Sortino Beta Tracking Error Information Treynor R-Squared 1 yr 0.97 3.98 1.15 6.59 0.78 0.12 79.15 % 3 yr -0.32 -0.40 1.03 8.95 -0.22 -0.06 75.46 % 5 yr -0.17 -0.03 1.01 7.82 0.06 -0.03 73.68 % . 7 yr -0.17 0.00 1.01 7.05 0.00 -0.02 74.81 % ly 10 yr -0.48 -0.46 1.13 7.25 -0.38 -0.07 81.84 %Positive/ Negative 1973/02/01 to 2010/12/31 Alpha 1973/02/01 to 2010/12/31 ce , on en up Positive Periods Alpha 64 4.00 % Time Time Asset Bmark Asset 51 frame frame 2.00 % 1 yr 8 8 1 yr 3.90 % Quarters 38 Alpha 3 yr 21 18 0.00 % 3 yr -1.85 % 26 5 yr 34 31 5 yr 0.50 % -2.00 % 13 er k 7 yr 47 43 7 yr -0.01 % 0 10 yr 64 60 -4.00 % 10 yr -2.11 % 1 3 5 7 10 1 3 5 7 10 ef oc Years Years Negative Periods Scatter Diagram 1973/02/01 to 2010/12/31 60 Time Asset Bmark 48 frame rr M 11 1 yr 4 4 Quarters 36 3 yr 15 18 24 5 yr 26 29 9 1 12 7 yr 37 41 Historical Nominal Return (%) 0 10 yr 56 60 7 1 3 5 7 10 Years 5Up/Down Market Capture 1973/02/01 to 2010/12/31 3 Up Market Capture 1.60 Time 1.40 Asset frame 1 1.20 1.00 1 yr 148.49 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Ratio 0.80 3 yr 110.34 Risk - Standard Deviation (%) fo 0.60 5 yr 106.49 0.40 Risk - 7 yr 98.00 Historical 0.20 Portfolio Standard Nominal Return 0.00 10 yr 110.22 Deviation(%) 1 3 5 7 10 AGF American Growth Class C$ 17.74 8.00 Years S&P 500 Total Return Index C$ 15.42 10.69 Down Market Capture 1.40 Time 1.20 Asset frame 1.00 1 yr 121.91 0.80 Ratio 3 yr 109.61 0.60 5 yr 100.02 0.40 0.20 7 yr 100.70 0.00 10 yr 103.34 1 3 5 7 10 YearsPast Performance does not guarantee future results and current performance may be lower or higher than past performance data.REPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 . 28
  • 29. Asset fact sheetRoyal Bank of Canada common shares RY:TSX As of October 31, 2010 . ly ce , on en up er k ef oc rr M foREPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 . 29
  • 30. DISCLOSURE Past performance does not guarantee future results and current performance may be lower or higher than past performance data. The investment return and principal value will fluctuate and securities, when sold, may be worth less or more than original h cost. Blended Return and Risk Information Blended returns are computed by taking each product’s quarterly return, weighting that return according to the selected asset allocation and calculating a weighted return. These figures are compounded quarterly. That calculation assumes that assets in a blended account were rebalanced quarterly to restore the selected target asset allocation among the different products. In actual practice, you may not necessarily rebalance at all, or with the same frequency or to the same extent. Rebalancing may require the sale and purchase of securities, which may result in a taxable event or losses to a client. Rebalancing also may involve a period during which client assets are . not actually invested; thus, a client whose account is rebalanced may not receive the same returns that are included in a strategy’s composite for a given quarter, since a composite typically shows only the returns of accounts that were managed for the entire quarter. ly Exchange Rates Exchange rates are provided by Morningstar and are based on the nightly 4:00 pm GMT closing spot rate as published on the London ce , Stock Exchange. Actual returns may fluctuate based on conversion rates used in the calculation. RBC Dominion Securities Inc. neither on en up guarantees nor makes any other representation that the information is accurate, correct, complete, timely or consistent. Index Comparisons The performance of an individual strategy, fund, and/or investment manager model may be compared to the returns of one or more market indexes. Such comparisons are subject to the following potential limitations: (1) the specification of an index here for a given asset class does not mean and should not be read as implying that the index is necessarily an appropriate benchmark for, or comparable to, each investment style or strategy specified. Instead, the inclusion of an index is intended only to provide a uniform reference point for the performance of one or more strategies in an asset class; (2) The composition and performance of an index that is specified may differ er k significantly and in multiple respects from the composition and performance of any individual strategy to which it is compared; (3) Any index shown was selected by and is the responsibility of the investment advisor and/or (CLIENT FIRM). ef oc ADDITIONAL DISCLOSURES The investment returns of any individual strategy and index are shown for comparative purposes. When comparing the investment returns of the strategy to those of the index, you should take into account that the investment manager does not necessarily hold the same securities as the index and that the index may not accurately reflect the asset allocation and portfolio characteristics of accounts managed by the investment manager. Investors cannot invest directly in an index. rr M The information provided has been obtained from data and sources believed to be reliable but are not guaranteed by (CLIENT FIRM). Opinions expressed are subject to change without notice. (CLIENT FIRM), its affiliates and its officers, directors and employees may from time to time acquire, hold or sell securities or mutual funds that may be referenced herein. This information is not intended as nor does it constitute tax or legal advice. You should consult your own lawyer, accountant or other professional advisor when planning to implement a strategy. All charts presented are hypothetical illustrations provided for informational purposes only and are not indicative of present or future results. Past performance is not indicative of future results and individual investor results will vary. Please consult your Investment Advisor for additional information. This document is intended for use in one-on-one presentations only. foREPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 30
  • 31. DISCLOSURE DESCRIPTION OF MODERN PORTFOLIO THEORY STATISTICS Alpha measures the difference between an investment’s actual returns and its expected performance, given its level of risk. Alpha = Return - (Beta x Index Return) Beta measures the performance of a manager in relationship to the market. A manager who performs directly in line with the market will typically have a beta equal to 1.0. A manager whose returns are more volatile than the market will have a beta greater than 1.0 and a manager whose returns are less volatile than the market will typically have a beta less than 1.0. Correlation measures how any two investments within the proposed portfolio move in relation to each other. Correlation coefficients fall between -1.00 and 1.00. A correlation coefficient of 1.00 between two investments means the investment returns have moved in perfect . tandem with each other. A correlation coefficient of -1.00 means the investment returns have moved in perfect negative tandem with each other. ly Information Ratio is a measure of value added by the manager. It is the ratio of (annualized) excess return above the benchmark to (annualized) tracking error. A ratio of 0.5 is good, 0.75 is very good, and a ratio of 1.0 is exceptional. ce , on Information Ratio = Excess Return / Tracking Error en up R-Squared measures how well a portfolio is diversified against the market index. The more diversified a portfolio is, the less risk related to an individual security (unsystematic risk) it has. R-squared values can range from 0 to 1.00, with the market index at 1.00. For a portfolio with an R-squared of .90, 90% of the portfolio risk can be attributed to “being in the market” (systematic risk). The remaining 10% is associated with company/issue specific (unsystematic) risk. Higher R-Squared values indicate more reliable alpha and beta statistics and are useful in assessing a manager’s investment style. Sharpe Ratio measures the investment’s returns per unit of risk. The higher the Sharpe ratio is the better the historical risk-adjusted performance. er k Sharpe Ratio = (Return - Risk-free Rate) / Standard Deviation ef oc Sortino Ratio measures the risk-adjusted return of a manager or portfolio. Standard Deviation is a statistical measure of the historical volatility of a manager or portfolio, usually compounded using 36 monthly returns. The larger the standard deviation is, the greater the range of possible returns and, therefore, the more risky the portfolio or index. Tracking Error measures how closely a managers returns track the returns of a benchmark. The tracking error is the annualized standard rr M deviation of the differences between the managers and the benchmarks quarterly returns. If a manager tracks a benchmark closely, the tracking error will be low. If a manager tracks a benchmark perfectly the tracking error will be 0. Treynor Ratio - measures excess return per unit of risk. The Treynor Ratio relates the difference between the portfolio return and the risk-free rate to the portfolio beta for a given time period. Good performance is measured by high ratio; i.e., a Treynor Ratio of 1 is better than a ratio of 0.5. Treynor Ratio = (Return – Risk free rate) / Beta Up-Market Capture Ratio shows what portion of market performance was captured by the portfolio in up markets. The ratio is calculated by dividing the portfolios returns by the returns of the blended benchmark during the periods when the blended benchmark return is positive and multiplying the result by 100. Down-Market Capture Ratio shows what portion of market performance was captured by the portfolio in down markets. The ratio is calculated by dividing the portfolios returns by the returns of the blended benchmark during the periods when the blended benchmark return is negative and multiplying the result by 100. foREPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 31
  • 32. ROLES AND RESPONSIBILITIESROLE AND RESPONSIBILITIES OF THE INVESTORAs the investor, I will:• Agree to the investment strategy specified in writing herein.• Will inform my account representative of any material changes in my financial, professional, health or other situation that may impinge on the present and future characteristics of the portfolio.• Agree to meet with my account representative on matters directly pertaining to the portfolio.• Respond to my account representatives requests for information• Periodically meet with my account representative to discuss rebalancing of the portfolio.ROLE AND RESPONSIBILITIES OF THE ACCOUNT REPRESENTATIVE . lyAs your account representative, I will:• Respond to your requests for information.• Accept investment decisions made by you, the investor, after account representative-investor discussion ce , of the matter. on en up• To the best of my knowledge and experience, uphold the investment strategy specified herein.• Regulary report to you on the value of the securities we have transacted for our account.• Meet with you periodically to review your asset mix and assess the need for rebalancing your portfolio.DISCLAIMER• Any reference in this Statement to "Equities" is typically a reference to the asset class of "Equities" and any reference to "Bonds" is typically a reference to the asset class of "Bonds". er k• in case of any conflict between the content of this Statement and the content of your Account Opening Form signed with your Dealer, including without limiting the generality of the foregoing, information ef oc regarding your investment objectives and risk tolerance, the content of your Account Opening Form shall be determinative.• Past performance is not indicative of future performance. The value of investments will fluctuate and is not guaranteed. Always read the Simplified Prospectus before investing. rr MTo be signed by the client(s)I, Albert A. Client, have read and understand the information presented above. I agree to the portfolio strategy describedherein and agree to the statements contained herein and to any actions consequential to them.Signed this ___________ day of ________________________, 20___.___________________________________Albert A. ClientI, Louise Client, have read and understand the information presented above. I agree to the portfolio strategy describedherein and agree to the statements contained herein and to any actions consequential to them.Signed this ___________ day of ________________________, 20___. fo___________________________________Louise ClientTo be signed by the advisorI, Charles Q. Broker, have read and understand the information presented above. I agree to the portfolio strategydescribed herein and agree to the statements contained herein and to any actions consequential to them.Signed this ___________ day of ________________________, 20___.___________________________________Charles Q. BrokerREPORT PREPARED FOR ALBERT A. CLIENT AND LOUISE CLIENT ON 2011/02/28 32

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