A PORTFOLIO MANAGERS PERSPECTIVE

Dividend stocks can enhance total returns and provide added stability: QV Investors
As part of our November 1, 2012 Wealth Matters webcast, we heard from Joe Jugovic, President, CEO and Portfolio Manager at QV Investors. His presentation, summarized on this page, offered a timely update on the economic and market environment and outlined QVs investment approach for the Canadian Equity Alpha Corporate Class mandate. Please see the reverse for highlights of the other half of the webcast in which one of United Financials tax experts discussed ideas on how to reduce tax on your estate and leave more assets for your beneficiaries. Joe Jugovics key message Historically, stocks that increase their dividends over time have significantly outperformed the overall market, while also providing increased stability for an investment portfolio. Our focus is dividend-paying stocks of companies with low valuations and strong balance sheets. QVs economic, political and market perspective Artificially low interest rates resulting from central bank efforts to encourage economic growth are creating artificial growth, which in turn translates into high market volatility. Government austerity measures, such as those in Europe, are inducing slow growth. In terms of yield, stocks offer better value than bonds. The S&P/TSX Composite Indexs estimated earnings yield for the next 12 months is approximately 7.6% compared to 2.5% for long-term Government of Canada bonds. In tough markets, stocks that pay dividends tend to perform better than those that do not. They also carry less risk. The average annual total return for the S&P/TSX Composite Index in the period December 1986 through April 2012 was 6.5%, while for the subset of stocks that paid dividends and increased them, the average total return was 11.8%. Astral Media: the power of dividend growth combined with capital gains QV Investors has added value to the Canadian Equity Alpha Corporate Class mandate through holdings such as Astral Media. With the stock price recently bid up in response to a takeover bid from BCE Inc., we sold and locked in a significant capital gain. The acquisition was later rejected by Canadas federal broadcast regulator, the CRTC. Comparing Canadian Equity Alpha Corporate Class to the Canadian equity market The Canadian equity market has over 75% of its value concentrated in three industry sectors: energy, materials and financials. The alpha mandate offers greater diversification, with about 43% currently allocated to those sectors. Top 10 holdings (As at September 30, 2012) Canadian Equity Alpha Corporate Class AltaGas Ltd. Atco Ltd. Empire Ltd. Canadian Utilities Ltd. E-L Financial Corp. Power Financial Corp. Telus Corp. CCL Industries Inc. Pason Systems SNC-Lavalin Group Total %
6.3 6.3 5.9 5.9 4.7 4.6 4.5 4.2 4.1 4.1 50.6

S&P/TSX Composite Index Royal Bank of Canada Toronto-Dominion Bank Bank of Nova Scotia Suncor Energy Inc. Barrick Gold Corp. Canadian National Railway Co. Bank of Montreal Potash Corporation of Saskatchewan Goldcorp Inc. BCE Inc. Total

%
5.5 5.0 4.3 3.3 2.8 2.5 2.5 2.5 2.5 2.3 33.2

A WEALTH PLANNING PERSPECTIVE

Effective tax planning can reduce taxes at death to leave more assets for beneficiaries

To be truly effective, tax planning requires a general understanding of the tax rules that apply not only during your lifetime, but also when you pass away. During the Wealth Matters webcast, one of United Financials tax experts, Titus Ebenezer, Director, Tax Services, outlined ideas that can minimize taxes on your estate and maximize assets for your intended beneficiaries. Several of his key points are summarized below. Opportunities to save tax through the multiple use of personal tax credits and graduated tax rates If you have different types of income at death, this could provide opportunities to save tax by filing several income tax returns. Certain personal tax credits the basic personal tax credit, the spousal tax credit, the equivalent-to-spouse tax credit, and the age tax credit can be claimed multiple times in the year of death since they can be claimed on more than one return. Taxable income is calculated for each return, allowing multiple use of the graduated tax rates. What tax returns may be filed on your behalf? Terminal (final) return. Special Rights or Things return for items such as unpaid share dividends or unpaid employment insurance benefits. Return for income from a proprietorship or partnership, and a return for income from a testamentary trust. Capital losses special rules apply Normally, realized capital losses can only be claimed against capital gains. Special rules apply for a deceased taxpayer: Any unused net capital losses may be claimed against any other income for the year of death. Any remaining net capital losses may be applied against any other income for the immediate preceding year. Any remaining net capital losses realized after the above application may be carried back two further years to be applied against capital gains for those years. In general, there may be tax advantages in electing a fair market value election for assets with accrued losses. A few words about taxation of RRSPs and other tax planning The full value of an RRSP must be reported in the terminal tax return unless it is transferred to a spouse, or a financially dependant child or grandchild. There are special rules in the year of death that may allow extra tax savings and flexibility in regards to claims for charitable donations, or medical expenses. Testamentary trusts, which can be established as part of a will, are taxed at graduated income tax rates applicable to individuals, which can provide tax savings. Your Assante advisor is available to help If you have questions about ensuring your tax planning is effective and tailored to your individual circumstances, talk to your advisor for assistance.
This document is intended solely for general information purposes. It is not a sales prospectus, nor should it be construed as an offer or an invitation to take part in an offer. Before acting on any of this information, please speak to your advisor for individual financial advice based on your personal circumstances. United Financial solutions are managed by CI Investments Inc. Assante Wealth Management (Canada) Ltd. and CI Private Counsel LP are subsidiaries of CI Investments Inc. Neither CI Investments Inc. nor its affiliates or their respective officers, directors, employees or advisors are responsible in any way for damages or losses of any kind whatsoever in respect of the use of this document. United Financial and design are registered trademarks of CI Investments Inc. The market commentary portion of this document reflects the views of the portfolio manager and does not necessarily reflect the views of CI Investments Inc. Commissions, trailing commissions, management fees and expenses may all be associated with investments in mutual funds. Investments in mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Please read the fund prospectus and consult your advisor before investing.