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INVESTING CONCEPT



   Equities drive asset growth
   The efficient frontier identifies the combination of assets that are expected to achieve the
   highest return for a given level of risk – meaning they are most efficient in terms of their
   risk/return characteristics.
   Since 1950, investing in fixed income has generally reduced investment risk. However, the
   stability of this asset class also lowers the long-term growth potential.
   Canadian equities have produced the necessary asset growth to achieve long term investment
   objectives. Even conservative investors should allocate at least 25% of their portfolio to equities.
   The expected outcome is enhanced investment returns with similar levels of investment risk
   over the long term.

                                                         S&P TSX Composite vs DEX long Term Efficient Frontiers (1950-2010)

                                       12.0


                                       11.5                                                                                                                                   100% TSX


                                       11.0
                                                                                                                             80% TSX/20% DEX

                                       10.5
                   Expected Return %




                                                                                  60% TSX/40% DEX
                                       10.0

                                                               45% TSX/55% DEX
                                        9.5

                                                  30% TSX/70% DEX
                                        9.0


                                        8.5


                                        8.0

                                                          100% DEX
                                        7.5


                                        7.0
                                              7            8           9            10                11                12               13                14                15                16
                                                                                               Risk (as measured by standard deviation)

                                                                                                                                                                Source: Investors Group Portfolio Analytics

    Investment products and services are offered through Investors Group Financial Services Inc. (in Québec, a Financial Services firm) and Investors Group Securities Inc. (in Québec, a firm in
    Financial Planning).
    Investors Group Securities Inc. is a member of the Canadian Investor Protection Fund.Written and published by Investors Group as a general source of information only. It is not intended as a solicitation to
    buy or sell specific investments, nor is it intended to provide tax, legal or investment advice. Readers should seek advice on their specific circumstances from an Investors Group Consultant
 ™ Trademark owned by IGM Financial Inc. and licensed to its subsidiary corporations.
    “Equities drive asset growth” © Investors Group Inc. 2010 C3746 (07/2010)

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Equities Drive Asset Growth

  • 1. INVESTING CONCEPT Equities drive asset growth The efficient frontier identifies the combination of assets that are expected to achieve the highest return for a given level of risk – meaning they are most efficient in terms of their risk/return characteristics. Since 1950, investing in fixed income has generally reduced investment risk. However, the stability of this asset class also lowers the long-term growth potential. Canadian equities have produced the necessary asset growth to achieve long term investment objectives. Even conservative investors should allocate at least 25% of their portfolio to equities. The expected outcome is enhanced investment returns with similar levels of investment risk over the long term. S&P TSX Composite vs DEX long Term Efficient Frontiers (1950-2010) 12.0 11.5 100% TSX 11.0 80% TSX/20% DEX 10.5 Expected Return % 60% TSX/40% DEX 10.0 45% TSX/55% DEX 9.5 30% TSX/70% DEX 9.0 8.5 8.0 100% DEX 7.5 7.0 7 8 9 10 11 12 13 14 15 16 Risk (as measured by standard deviation) Source: Investors Group Portfolio Analytics Investment products and services are offered through Investors Group Financial Services Inc. (in Québec, a Financial Services firm) and Investors Group Securities Inc. (in Québec, a firm in Financial Planning). Investors Group Securities Inc. is a member of the Canadian Investor Protection Fund.Written and published by Investors Group as a general source of information only. It is not intended as a solicitation to buy or sell specific investments, nor is it intended to provide tax, legal or investment advice. Readers should seek advice on their specific circumstances from an Investors Group Consultant ™ Trademark owned by IGM Financial Inc. and licensed to its subsidiary corporations. “Equities drive asset growth” © Investors Group Inc. 2010 C3746 (07/2010)